poverty philosophy (marx)

Karl Marx 1847

The Poverty of Philosophy Answer to the Philosophy of Poverty by M. Proudhon

Written: First half of 1847;

Source: The Poverty of Philosophy, by Karl Marx, Progress Publishers, 1955;

First Published: in Paris and Brussels, 1847;

Translated: from the French by the Institute of Marxism-Leninism, 1955;

Transcribed: by Zodiac for Marx/Engels Internet Archive (marxists.org) 1999;

Proofed: and corrected by Matthew Carmody, 2009.

In this work Marx critiques the economic (chapter one) and philosophical (chapter two) doctrine of P.

J. Proudhon.

Marx started work on this book in January 1847, as can be judged from Engels‟ letter to Marx on

January 15, 1847. By the beginning of April 1847, Marx‟s work was completed in the main and had

gone to the press. On June 15, 1847 he wrote a short foreword.

Published in Paris and Brussels in 1847, the book was not republished in full during Marx‟s lifetime.

Excerpts from section five of Chapter Two appeared in different years, mostly between 1872 - 1875 in

papers such as La Emancipacion, Der Volksstaat, Social-Demokrat, and others. In 1880 Marx

attempted to publish the Poverty of Philosophy in the French socialist newspaper L’Égalité, the organ

of the French Workers‟ Party, but only the foreword and section one of Chapter One were published.

This translation is from the original 1847 French edition. It has been updated to also include the

changes/corrections Marx made in the copy of the book he presented to N. Utina in 1876, as well as

the corrections made by Frederick Engels in the second French edition and the German editions of

1885 and 1892. Twentieth Century Press published the first English edition of this work in 1900.

Note: italics in quotations are as a rule Marx‟s. Also, references added in brackets correspond to the

same edition Marx used.

Foreword M. Proudhon has the misfortune of being peculiarly misunderstood in Europe. In France, he has

the right to be a bad economist, because he is reputed to be a good German philosopher. In

Germany, he has the right to be a bad philosopher, because he is reputed to be one of the ablest

French economists. Being both German and economist at the same time, we desire to protest

against this double error.

The reader will understand that in this thankless task we have often had to abandon our criticism

of M. Proudhon in order to criticize German philosophy, and at the same time to give some

observations on political economy.

Karl Marx Brussels, June 15, 1847

M. Proudhon‟s work is not just a treatise on political economy, an ordinary book; it is a bible.

“Mysteries,” “Secrets Wrested from the Bosom of God,” “Revelations” – it lacks nothing. But as

prophets are discussed nowadays more conscientiously than profane writers, the reader must

resign himself to going with us through the arid and gloomy eruditions of “Genesis,” in order to

ascend later, with M. Proudhon, into the ethereal and fertile realm of super-socialism. (See

Proudhon, Philosophy of Poverty, Prologue, p. III, line 20.)

2 Poverty of Philosophy. Introduction

Marx and Rodbertus Preface to the First German Edition by Frederick Engels

Engels‟ letters written between August and October 1884 show that he did a great deal of work in

preparing Marx‟s Poverty of Philosophy for publication in German. (The book was written and

published in French in 1847 and was not republished in full during Marx‟s lifetime.) Engels edited the

translation made by Eduard Bernstein and Karl Kautsky and supplied a number of notes to it.

The first German edition of Marx‟s book appeared in the second half of January 1885 and, a little

earlier, at the beginning of January, Engels published his Preface in the magazine Die Neue Zeit under

the title “Marx und Rodbertus.” It was also included in the second German edition of the book which

appeared in 1892 with a special preface written by Engels. – Editors.

The present work was produced in the winter of 1846-47, at a time when Marx had cleared up for

himself the basic features of his new historical and economic outlook. Proudhon‟s Système des

contradictions économiques, ou Philosophie de la misère, which had just appeared, gave him the

opportunity to develop these basic features, setting them against the views of a man who, from

then on, was to occupy the most important place among living French socialists. Since the time in

Paris when the two of them had often spent whole nights discussing economic questions, their

paths had increasingly diverged: Proudhon‟s book proved that there was already an unbridgeable

gulf between them. To ignore it was at that time impossible, and so Marx put on record the

irreparable rupture in this reply of his.

Marx‟s general opinion of Proudhon is to be found in the article which appeared in the Berlin

Social-Demokrat Nos. 16, 17 and 18 for 1865. It was the only article Marx wrote for that paper;

Herr von Schweitzer‟s attempts to guide it along feudal and government lines, which became

evident soon afterwards, compelled us to publicly terminate our collaboration after only a few

weeks.1

For Germany, the present work has at this precise moment a significance which Marx himself

never imagined. How could he have known that, in trouncing Proudhon, he was hitting

Rodbertus, the idol of the careerists of today, who was unknown to him even by name at that

time?

This is not the place to deal with relations between Marx and Rodbertus; an opportunity for that is

sure to present itself to me very soon.2 Suffice it to note here that when Rodbertus accuses Marx

of having “plundered” him and of having “freely used in his Capital without quoting him” his

work Zur Erkenntnis, he allows himself to indulge in an act of slander which is only explicable by

the irksomeness of unrecognised genius and by his remarkable ignorance of things taking place

outside Prussia, and especially of socialist and economic literature. Neither these charges, nor the

above-mentioned work by Rodbertus ever came to Marx‟s sight; all he knew of Rodbertus was

the three Sociale Briefe and even these certainly not before 1858 or 1859.

With greater reason Rodbertus asserts in these letters that he had already discovered “Proudhon‟s

constituted value” before Proudhon; but here again it is true he erroneously flatters himself with

being the first discoverer. In any case, he is thus one of the targets of criticism in the present

work, and this compels me to deal briefly with his “fundamental” piece: Zur Erkenntnis unsrer

staatswirthschaftlichen Zustände, 1842, insofar as this brings forth anticipations of Proudhon as

well as the communism of Weitling likewise (again unconsciously) contained in it.

Insofar as modern socialism, no matter of what tendency, starts out from bourgeois political

economy, it almost without exception takes up the Ricardian theory of value. The two

propositions which Ricardo proclaimed in 1817 right at the beginning of his Principles,


1) That the value of any commodity is purely and solely determined by the

quantity of labour required for its production, and

2) That the product of the entire social labour is divided among the three classes:

landowners (rent), capitalists (profit) and workers (wages)

These two propositions had ever since 1821 been utilised in England for socialist conclusions3,

and in part with such pointedness and resolution that this literature, which had then almost been

forgotten and was to a large extent only rediscovered by Marx, remained unsurpassed until the

appearance of Capital. About this another time. If, therefore, in 1842 Rodbertus for his part drew

socialist conclusions from the above propositions, that was certainly a very considerable step

forward for a German at that time, but it could rank as a new discovery only for Germany at best.

That such an application of the Ricardian theory was far from new was proved by Marx against

Proudhon, who suffered from a similar conceit.

“Anyone who is in any way familiar with the trend of political economy in England cannot fail to

know that almost all the socialists in that country have, at different periods, proposed the

equalitarian (i.e. socialist) application of Ricardian theory. We could quote for M. Proudhon:

Hodgskin, Political Economy, 1827; William Thompson, An Inquiry into the Principles of the

Distribution of Wealth Most Conducive to Human Happiness, 1824; T. R. Edmonds, Practical

Moral and Political Economy, 1828, etc., etc., and four pages more of etc. We shall content

ourselves with listening to an English Communist, Mr. Bray ... in his remarkable work, Labour’s

Wrongs and Labour’s Remedy, Leeds, 1839.”

And the quotations given here from Bray on their own put an end to a good part of the priority

claimed by Rodbertus.

At that time Marx had never yet entered the reading room of the British Museum. Apart from the

libraries of Paris and Brussels, apart from my books and extracts, he had only examined such

books as were obtainable in Manchester during a six-week journey to England we made together

in the summer of 1845. The literature in question was, therefore, by no means so inaccessible in

the forties as it may be now. If, all the same, it always remained unknown to Rodbertus, that is to

be ascribed solely to his Prussian local bigotry. He is the actual founder of specifically Prussian

socialism and is now at last recognised as such.

However, even in his beloved Prussia, Rodbertus was not to remain undisturbed. In 1859, Marx‟s

A Contribution to the Critique of Political Economy, Part I, was published in Berlin. Therein,

among the economists‟ objections to Ricardo, the following was put forward as the second

objection (p. 40):

“If the exchange value of a product equals the labour time contained in the

product, then the exchange value of a working day is equal to the product it yields,

in other words, wages must be equal to the product of labour. But in fact the

opposite is true.”

On this there was the following note:

“This objection, which was advanced against Ricardo by economists, was later

taken up by socialists. Assuming that the formula was theoretically sound, they

alleged that practice stood in conflict with the theory and demanded that

bourgeois society should draw the practical conclusions supposedly arising from

its theoretical principles. In this way at least English socialists turned Ricardo‟s

formula of exchange value against political economy.”

In the same note there was a reference to Marx‟s Misère de la philosophie, which was then

obtainable in all the bookshops.

Rodbertus, therefore, had sufficient opportunity of convincing himself whether his discoveries of

1842 were really new. Instead he proclaims them again and again and regards them as so


incomparable that it never occurs to him that Marx might have drawn his conclusions from

Ricardo independently, just as well as Rodbertus himself. Absolutely impossible! Marx had

“plundered” him – the man whom the same Marx had offered every opportunity to convince

himself how long before both of them these conclusions, at least in the crude form which they

still have in the case of Rodbertus, had previously been enunciated in England!

The simplest socialist application of the Ricardian theory is indeed that given above. It has led in

many cases to insights into the origin and nature of surplus value which go far beyond Ricardo, as

in the case of Rodbertus among others. Quite apart from the fact that on this matter he nowhere

presents anything which has not already been said at least as well, before him, his presentation

suffers like those of his predecessors from the fact that he adopts, uncritically and without

examining their content, economic categories – labour, capital, value, etc. – in the crude form,

clinging to their external appearance, in which they were handed down to him by the economists.

He thereby not only cuts himself off from all further development – in contrast to Marx who was

the first to make something of these propositions so often repeated for the last sixty-four years –

but, as will be shown, he opens for himself the road leading straight to utopia.

The above application of the Ricardian theory that the entire social product belongs to the

workers as their product, because they are the sole real producers, leads directly to communism.

But, as Marx indeed indicates in the above-quoted passage, it is incorrect in formal economic

terms, for it is simply an application of morality to economics. According to the laws of

bourgeois economics, the greatest part of the product does not belong to the workers who have

produced it. If we now say: that is unjust, that ought not to be so, then that has nothing

immediately to do with economics. We are merely saying that this economic fact is in

contradiction to our sense of morality. Marx, therefore, never based his communist demands upon

this, but upon the inevitable collapse of the capitalist mode of production which is daily taking

place before our eyes to an ever growing degree; he says only that surplus value consists of

unpaid labour, which is a simple fact. But what in economic terms may be formally incorrect,

may all the same be correct from the point of view of world history. If mass moral consciousness

declares an economic fact to be unjust, as it did at one time in the case of slavery and statute

labour, that is proof that the fact itself has outlived its day, that other economic facts have made

their appearance due to which the former has become unbearable and untenable. Therefore, a very

true economic content may be concealed behind the formal economic incorrectness. This is not

the place to deal more closely with the significance and history of the theory of surplus value.

At the same time other conclusions can be drawn, and have been drawn, from the Ricardian

theory of value. The value of commodities is determined by the labour required for their

production. But now it turns out that in this imperfect world commodities are sold sometimes

above, sometimes below their value, and indeed not only as a result of ups and downs in

competition. The rate of profit tends just as much to balance out at the same level for all

capitalists as the price of commodities does to become reduced to the labour value by agency of

supply and demand. But the rate of profit is calculated on the total capital invested in an industrial

business. Since now the annual products in two different branches of industry may incorporate

equal quantities of labour, and, consequently, may represent equal values and also wages may be

at an equal level in both, while the capital advanced in one branch may be, and often is, twice or

three times as great as in the other, consequently the Ricardian law of value, as Ricardo himself

discovered, comes into contradiction here with the law of the equal rate of profit. If the products

of both branches of industry are sold at their values, the rates of profit cannot be equal; if,

however, the rates of profit are equal, then the products of the two branches of industry cannot

always be sold at their values. Thus, we have here a contradiction, the antinomy of two economic

laws, the practical resolution of which takes place according to Ricardo (Chapter I, Section 4 and

54) as a rule in favour of the rate of profit at the cost of value.


But the Ricardian definition of value, in spite of its ominous characteristics, has a feature which

makes it dear to the heart of the honest bourgeois. It appeals with irresistible force to his sense of

justice. Justice and equality of rights are the cornerstones on which the bourgeois of the

eighteenth and nineteenth centuries would like to erect his social edifice over the ruins of feudal

injustice, inequality and privilege. And the determination of value of commodities by labour and

the free exchange of the products of labour, taking place according to this measure of value

between commodity owners with equal rights, these are, as Marx has already proved, the real

foundations on which the whole political, juridical and philosophical ideology of the modern

bourgeoisie has been built. Once it is recognised that labour is the measure of value of a

commodity, the better feelings of the honest bourgeois cannot but be deeply wounded by the

wickedness of a world which, while recognising the basic law of justice in name, still in fact

appears at every moment to set it aside without compunction. And the petty bourgeois especially,

whose honest labour – even if it is only that of his workmen and apprentices – is daily more and

more depreciated in value by the competition of large-scale production and machinery, this small-

scale producer especially must long for a society in which the exchange of products according to

their labour value is at last a complete and invariable truth. In other words, he must long for a

society in which a single law of commodity production prevails exclusively and in full, but in

which the conditions are abolished in which it can prevail at all, viz., the other laws of commodity

production and, later, of capitalist production.

How deeply this utopia has struck roots in the way of thinking of the modern petty bourgeois –

real or ideal – is proved by the fact that it was systematically developed by John Gray back in

1831, that it was tried in practice and theoretically propagated in England in the thirties, that it

was proclaimed as the latest truth by Rodbertus in Germany in 1842 and by Proudhon in France

in 1846, that it was again proclaimed by Rodbertus as late as 1871 as the solution to the social

question and, as, so to say, his social testament, and that in 1884 it again finds adherents among

the horde of careerists who in the name of Rodbertus set out to exploit Prussian state socialism.5

The critique of this utopia has been so exhaustively furnished by Marx both against Proudhon and

against Gray (see the appendix to this work) that I can confine myself here to a few remarks on

the form of substantiating and depicting it peculiar to Rodbertus.

As already noted, Rodbertus adopts the traditional definitions of economic concepts entirely in

the form in which they have come down to him from the economists. He does not make the

slightest attempt to investigate them. Value is for him

“the valuation of one thing against others according to quantity, this valuation

being conceived as measure”

This, to put it mildly, extremely slovenly definition gives us at the best an idea of what value

approximately looks like, but says absolutely nothing of what it is. Since this, however, is all that

Rodbertus is able to tell us about value, it is understandable that he looks for a measure of value

located outside value. After thirty pages in which he mixes up use value and exchange value in

higgledy-piggledy fashion with that power of abstract thought so infinitely admired by Herr

Adolf Wagner,6 he arrives at the conclusion that there is no real measure of value and that one

has to make do with a substitute measure. Labour could serve as such but only if products of an

equal quantity of labour were always exchanged against products of an equal quantity of labour

whether this “is already the case of itself, or whether precautionary measures are adopted” to

ensure that it is. Consequently value and labour remain without any sort of material connection in

spite of the fact that the whole first chapter is taken up to expound to us that commodities “cost

labour” and nothing but labour, and why this is so.

Labour, again, is taken uncritically in the form in which it occurs among the economists. And not

even that. For, although there is a reference in a couple of words to differences in intensity of

labour, labour is still put forward quite generally as something which “costs,” hence as something


which measures value, quite irrespective of whether it is expended under normal average social

conditions or not. Whether the producers take ten days, or only one, to make products which

could be made in one day; whether they employ the best or the worst tools; whether they expend

their labour time in the production of socially necessary articles and in the socially required

quantity, or whether they make quite undesired articles or desired articles in quantities above or

below demand – about all this there is not a word: labour is labour, the product of equal labour

must be exchanged against the product of equal labour. Rodbertus, who is otherwise always

ready, whether rightly or not, to adopt the national standpoint and to survey the relations of

individual producers from the high watchtower of general social considerations, is anxious to

avoid doing so here. And this, indeed, solely because from the very first line of his book he

makes directly for the utopia of labour money, and because any investigation of labour seen from

its property of creating value would be bound to put insuperable obstacles in his way. His instinct

was here considerably stronger than his power of abstract thought which, by the by, is revealed in

Rodbertus only by the most concrete absence of ideas.

The transition to utopia is now made in the turn of a hand. The “measures,” which ensure

exchange of commodities according to labour value as the invariable rule, cause no difficulty.

The other utopians of this tendency, from Gray to Proudhon, rack their brains to invent social

institutions which would achieve this aim. They attempt at least to solve the economic question in

an economic way through the action of the owners themselves who exchange the commodities.

For Rodbertus it is much easier. As a good Prussian he appeals to the state: a decree of the state

authority orders the reform.

In this way then, value is happily “constituted,” but by no means the priority in this constitution

as claimed by Rodbertus. On the contrary, Gray as well as Bray – among many others – before

Rodbertus, at length and frequently ad nauseam, repeated this idea, viz. the pious desire for

measures by means of which products would always and under all circumstances be exchanged

only at their labour value.

After the state has thus constituted value – at least for a part of the products, for Rodbertus is also

modest – it issues its labour paper money, and gives advances therefrom to the industrial

capitalists, with which the latter pay the workers, whereupon the workers buy the products with

the labour paper money they have received, and so cause the paper money to flow back to its

starting point. How very beautifully this is effected, one must hear from Rodbertus himself:

“In regard to the second condition, the necessary measure that the value certified

in the note should be actually present in circulation is realised in that only the

person who actually delivers a product receives a note, on which is accurately

recorded the quantity of labour by which the product was produced, Whoever

delivers a product of two days‟ labour receives a note marked „two days‟. By the

strict observance of this rule in the issue of notes, the second condition too would

necessarily be fulfilled. For according to our supposition the real value of the

goods always coincides with the quantity of labour which their production has

cost and this quantity of labour is measured by the usual units of time, and

therefore someone who hands in a product on which two days‟ labour has been

expended and receives a certificate for two days, has received, certified or

assigned to him neither more nor less value than that which he has in fact

supplied. Further, since only the person who has actually put a product into

circulation receives such a certificate, it is also certain that the value marked on

the note is available for the satisfaction of society. However extensive we imagine

the circle of division of labour to be, if this rule is strictly followed the sum total

of available value must be exactly equal to the sum total of certified value. Since,

however, the sum total of certified value is exactly equal to the sum total of value


assigned, the latter must necessarily coincide with the available value, all claims

will be satisfied and the liquidation correctly brought about” (pp. 166-67).

If Rodbertus has hitherto always had the misfortune to arrive too late with his new discoveries,

this time at least he has the merit of one sort of originality: none of his rivals has dared to express

the stupidity of the labour money utopia in this childishly naive, transparent, I might say truly

Pomeranian, form. Since for every paper certificate a corresponding object of value has been

delivered, and no object of value is supplied except in return for a corresponding paper certificate,

the sum total of paper certificates must always be covered by the sum total of objects of value.

The calculation works out without the smallest remainder, it is correct down to a second of labour

time, and no governmental chief revenue office accountant, however many years of faithful

service he may have behind him, could prove the slightest error in calculation. What more could

one want?

In present-day capitalist society each industrial capitalist produces off his own bat what, how and

as much as he likes. The social demand, however, remains an unknown magnitude to him, both in

regard to quality, the kind of objects required, and in regard to quantity. That which today cannot

be supplied quickly enough, may tomorrow be offered far in excess of the demand. Nevertheless,

demand is finally satisfied in one way or another, good or bad, and, taken as a whole, production

is ultimately geared towards the objects required. How is this evening-out of the contradiction

effected? By competition. And how does competition bring about this solution? Simply by

depreciating below their labour value those commodities which by their kind or amount are

useless for immediate social requirements, and by making the producers feel, through this

roundabout means, that they have produced either absolutely useless articles or ostensibly useful

articles in unusable, superfluous quantity. Two things follow from this:

First, continual deviations of the prices of commodities from their values are the necessary

condition in and through which the value of the commodities as such can come into existence.

Only through the fluctuations of competition, and consequently of commodity prices, does the

law of value of commodity production assert itself and the determination of the value of the

commodity by the socially necessary labour time become a reality. That thereby the form of

manifestation of value, the price, as a rule looks somewhat different from the value which it

manifests, is a fate which value shares with most social relations. A king usually looks quite

different from the monarchy which he represents. To desire, in a society of producers who

exchange their commodities, to establish the determination of value by labour time, by forbidding

competition to establish this determination of value through pressure on prices in the only way it

can be established, is therefore merely to prove that, at least in this sphere, one has adopted the

usual utopian disdain of economic laws.

Secondly, competition, by bringing into operation the law of value of commodity production in a

society of producers who exchange their commodities, precisely thereby brings about the only

organisation and arrangement of social production which is possible in the circumstances. Only

through the undervaluation or overvaluation of products is it forcibly brought home to the

individual commodity producers what society requires or does not require and in what amounts.

But it is precisely this sole regulator that the utopia advocated by Rodbertus among others wishes

to abolish. And if we then ask what guarantee we have that necessary quantity and not more of

each product will be produced, that we shall not go hungry in regard to corn and meat while we

are choked in beet sugar and drowned in potato spirit, that we shall not lack trousers to cover our

nakedness while trouser buttons flood us by the million – Rodbertus triumphantly shows us his

splendid calculation, according to which the correct certificate has been handed out for every

superfluous pound of sugar, for every unsold barrel of spirit, for every unusable trouser button, a

calculation which “works out” exactly, and according to which “all claims will be satisfied and

the liquidation correctly brought about.” And anyone who does not believe this can apply to

governmental chief revenue office accountant X in Pomerania who has checked the calculation


and found it correct, and who, as one who has never yet been caught lacking with the accounts, is

thoroughly trustworthy.

And now consider the naiveté with which Rodbertus would abolish industrial and commercial

crises by means of his utopia. As soon as the production of commodities has assumed world

market dimensions, the evening-out between the individual producers who produce for private

account and the market for which they produce, which in respect of quantity and quality of

demand is more or less unknown to them, is established by means of a storm on the world market,

by a commercial crisis.* If now competition is to be forbidden to make the individual producers

aware, by a rise or fall in prices, how the world market stands, then they are completely

blindfolded. To institute the production of commodities in such a fashion that the producers can

no longer learn anything about the state of the market for which they are producing – that indeed

is a cure for the crisis disease which could make Dr. Eisenbart envious of Rodbertus.

It is now comprehensible why Rodbertus determines the value of commodities simply by

“labour” and at most allows for different degrees of intensity of labour. If he had investigated by

what means and how labour creates value and therefore also determines and measures it, he

would have arrived at socially necessary labour, necessary for the individual product, both in

relation to other products of the same kind and also in relation to society‟s total demand. He

would thereby have been confronted with the question as to how the adjustment of the production

of separate commodity producers to the total social demand takes place, and his whole utopia

would thereby have been made impossible. This time he preferred in fact to “make an

abstraction,” namely of precisely that which mattered.

Now at last we come to the point where Rodbertus really offers us something new; something

which distinguishes him from all his numerous fellow supporters of the labour money exchange

economy. They all demand this exchange organisation for the purpose of abolishing the

exploitation of wage labour by capital. Every producer is to receive the full labour value of his

product. On this they all agree, from Gray to Proudhon. Not at all, says Rodbertus. Wage labour

and its exploitation remain.

In the first place, in no conceivable condition of society can the worker receive the full value of

his product for consumption. A series of economically unproductive but necessary functions have

to be met from the fund produced, and consequently also the persons connected with them

maintained. This is only correct so long as the present-day division of labour applies. In a society

in which general productive labour is obligatory, which is also “conceivable” after all, this ceases

to apply. But the need for a social reserve and accumulation fund would remain and consequently

even in that case, the workers, i.e., all, would remain in possession and enjoyment of their total

product, but each separate worker would not enjoy the “full returns of his labour.” Nor has the

maintenance of economically unproductive functions at the expense of the labour product been

overlooked by the other labour money utopians. But they leave the workers to tax themselves for

this purpose in the usual democratic way, while Rodbertus, whose whole social reform of 1842 is

geared to the Prussian state of that time, refers the whole matter to the decision of the

bureaucracy, which determines from above the share of the worker in his own product and

graciously permits him to have it.

In the second place, however, rent and profit are also to continue undiminished. For the

landowners and industrial capitalists also exercise certain socially useful or even necessary

functions, even if economically unproductive ones, and they receive in the shape of rent and

* At least this was the case until recently. Since England‟s monopoly of the world market is being increasingly

shattered by the participation of France, Germany and, above all, America in world trade, a new form of evening-out

appears to come into operation. The period of general prosperity preceding the crisis still fails to appear. If it should

remain absent altogether, then chronic stagnation must necessarily become the normal condition of modern industry,

with only insignificant fluctuations. – Note by Engels.


profit a sort of pay on that account – a conception which was, it will be recalled, not new even in

1842. Actually they get at present far too much for the little that they do, and badly at that, but

Rodbertus has need, at least for the next five hundred years, of a privileged class, and so the

present rate of surplus value, to express myself correctly, is to remain in existence but is not to be

allowed to be increased. This present rate of surplus value Rodbertus takes to be 200 per cent,

that is to say, for twelve hours of labour daily the worker is to receive a certificate not for twelve

hours but only for four, and the value produced in the remaining eight hours is to be divided

between landowner and capitalist. Rodbertus‟ labour certificates, therefore, are a direct lie. Again,

one must be a Pomeranian manor owner in order to imagine that a working class would put up

with working twelve hours in order to receive a certificate for four hours of labour. If the hocus-

pocus of capitalist production is translated into this naïve language, in which it appears as naked

robbery, it is made impossible. Every certificate given to a worker would be a direct instigation to

rebellion and would come under § 110 of the German Imperial Criminal Code.7 One need never

have seen any other proletariat than the day-labourer proletariat, still actually in semi-serfdom, of

a Pomeranian manor where the rod and the whip reign supreme, and where all the beautiful

women in the village belong to his lordship‟s harem, in order to imagine one can treat the workers

in such a shamefaced manner. But, after all, our conservatives are our greatest revolutionaries.

If, however, our workers are sufficiently docile to be taken in that they have in reality only

worked four hours during a whole twelve hours of hard work, they are, as a reward, to be

guaranteed that for all eternity their share in their own product will never fall below a third. That

is indeed pie in the sky of the most infantile kind and not worth wasting a word over. Insofar,

therefore, as there is anything novel in the labour money exchange utopia of Rodbertus, this

novelty is simply childish and far below the achievements of his numerous comrades both before

and after him.

For the time when Rodbertus‟ Zur Erkenntnis, etc., appeared, it was certainly an important book.

His development of Ricardo‟s theory of value in that one direction was a very promising

beginning. Even if it was new only for him and for Germany, still as a whole, it stands on a par

with the achievements of the better ones among his English predecessors. But it was only a

beginning, from which a real gain for theory could be achieved only by further thorough and

critical work. But he cut himself off from further development by also tackling the development

of Ricardo‟s theory from the very beginning in the second direction, in the direction of utopia.

Thereby he surrendered the first condition of all criticism – freedom from bias. He worked on

towards a goal fixed in advance, he became a Tendenzökonom. Once imprisoned by his utopia, he

cut himself off from all possibility of scientific advance. From 1842 up to his death, he went

round in circles, always repeating the same ideas which he had already expressed or suggested in

his first work, feeling himself unappreciated, finding himself plundered, where there was nothing

to plunder, and finally refusing, not without intention, to recognise that in essence he had only

rediscovered what had already been discovered long before.

In a few places the translation departs from the printed French original. This is due to handwritten

alterations by Marx, which will also be inserted in the new French edition that is now being

prepared.8

It is hardly necessary to point out that the terminology used in this work does not entirely

coincide with that in Capital. Thus this work still speaks of labour as a commodity, of the

purchase and sale of labour, instead of labour power.

Also added as a supplement to this edition are:

1) A passage from Marx‟s work A Contribution to the Critique of Political

Economy, Berlin, 1859, dealing with the first labour money exchange utopia of

John Gray, and

http://marx.org/archive/marx/works/1847/poverty-philosophy/pre-1885.htm#n7


2) A translation of Marx‟s speech on free trade in Brussels (1848), which belongs

to the same period of the author‟s development as the Misère.

London, October 23, 1884 Frederick Engels

Engels’ 1892 Introduction For the second edition I have only to remark that the name wrongly written Hopkins in the French

text (on page 45) has been replaced by the correct name Hodgskin and that in the same place the

date of the work of William Thompson has been corrected to 1824. It is to be hoped that this will

appease the bibliographical conscience of Professor Anton Menger.

Frederick Engels London, March 29, 1892

Notes

1. Marx wrote the statement about the break with Der Social-Demokrat on February 18, 1865 and sent

it to Engels, who fully endorsed it and returned it to Marx with his signature; on February 23, 1865

Marx sent the statement to the editors of the newspaper. This was occasioned by Schweitzer‟s series of

articles Das Ministerium Bismarck in which he expressed overt support for Bismarck‟s policy of

unifying Germany under Prussian supremacy. Marx took measures to make Schweitzer publish the

statement. It was published in many papers, among them the Barmer Zeitung and Elberfelder Zeitung

on February 26. Schweitzer was forced to publish this statement in Der Social Demokrat, No. 29,

March 3, 1865.

2. The reference is to Engels‟ Preface to the first German edition of Vol. II of Marx‟s Capital, which

Engels completed on May 5, 1885.

3. See the anonymous pamphlet: The Source and Remedy of the National Difficulties, deduced from

principles of political economy, in a letter to Lord John Russell, London, 1821.

For more details about the pamphlet see Engels‟ Preface to Vol. II of Marx‟s Capital.

4. Engels is referring to the second edition of Ricardo‟s book On the Principles of Political Economy,

and Taxation, London, 1819, pp. 32-46, where the author divided the text into sections.

5. The reference is to the people who took part in publishing the literary legacy of Rodbertus-

Jagetzow, in particular his work Das Kapital. Vierter socialer Brief an von Kirchmann, Berlin, 1884;

the publisher of this work and the author of the introduction to it was Theophil Kozak; the preface was

written by the German vulgar economist Adolf Wagner.

6. Engels is referring to the preface to K. Rodbertus-Jagetzow‟s work, Das Kapital. Vierter socialer

Brief an von Kirchmann, Berlin, 1884, pp. VII-VIII, in which Adolf Wagner wrote: “Rodbertus

evinces here such a power of abstract thinking as is possessed only by the greatest masters.”

7. § 110 of the German Imperial Criminal Code promulgated in 1871 stipulated a fine of up to 600

marks or imprisonment for a term of up to 2 years for a public appeal in writing to disobey the laws

and decrees operating in the German Empire.

8. The second French edition of The Poverty of Philosophy, which was being prepared by Marx‟s

daughter Laura Lafargue, appeared in Paris only after Engels‟ death, in 1896.

Chapter One: A Scientific Discovery

§ 1. The Antithesis of Use Value and Exchange Value

”The capacity for all products, whether natural or industrial, to contribute to

man‟s subsistence is specifically termed use value; their capacity to be given in

exchange for one another, exchange value.... How does use value become

exchange value?... The genesis of the idea of (exchange) value has not been noted

by economists with sufficient care. It is necessary, therefore, for us to dwell upon

it. Since a very large number of the things I need occur in nature only in moderate

quantities, or even not at all, I am forced to assist in the production of what I lack.

And as I cannot set my hand to so many things, I shall propose to other men, my

collaborators in various functions, to cede to me a part of their products in

exchange for mine.” (Proudhon, Vol. I, Chap. II)

M. Proudhon undertakes to explain to us first of all the double nature of value, the “distinction in

value,” the process by which use value is transformed into exchange value. It is necessary for us

to dwell with M. Proudhon upon this act of transubstantiation. The following is how this act is

accomplished, according to our author.

A very large number of products are not to be found in nature, they are products of industry. If

man‟s needs go beyond nature‟s spontaneous production, he is forced to have recourse to

industrial production. What is this industry in M. Proudhon‟s view? What is its origin? A single

individual, feeling the need for a very great number of things, “cannot set his hand to so many

things.” So many things to produce presuppose at once more than one man‟s hand helping to

produce them. Now, the moment you postulate more than one hand helping in production, you at

once presuppose a whole production based on the division of labour. Thus need, as M. Proudhon

presupposes it, itself presupposes the whole division of labour. In presupposing the division of

labour, you get exchange, and, consequently, exchange value. One might as well have

presupposed exchange value from the very beginning.

But M. Proudhon prefers to go the roundabout way. Let us follow him in all his detours, which

always bring him back to his starting point.

In order to emerge from the condition in which everyone produces in isolation and to arrive at

exchange, “I turn to my collaborators in various functions,” says M. Proudhon. I, myself, then,

have collaborators, all with different function. And yet, for all that, I and all the others, always

according to M. Proudhon‟s supposition, have got no farther than the solitary and hardly social

position of the Robinsons. The collaborators and the various functions, the division of labour and

the exchange it implies, are already at hand.

To sum up: I have certain needs which are founded on the division of labour and on exchange. In

presupposing these needs, M. Proudhon has thus presupposed exchange, exchange value, the very

thing of which he purposes to “note the genesis with more care than other economists.”

M. Proudhon might just as well have inverted the order of things, without in any way affecting

the accuracy of his conclusions. To explain exchange value, we must have exchange. To explain

exchange, we must have the division of labour. To explain the division of labour, we must have

needs which render necessary the division of labour. To explain these needs, we must

“presuppose” them, which is not to deny them – contrary to the first axiom in M. Proudhon‟s

prologue: “To presuppose God is to deny him.” (Prologue, p. 1)

How does M. Proudhon, who assumes the division of labour as the known, manage to explain

exchange value, which for him is always the unknown?

“A man” sets out to “propose to other men, his collaborators in various functions,” that they

establish exchange, and make a distinction between ordinary value and exchange value. In

12 Poverty of Philosophy. Chapter One

accepting this proposed distinction, the collaborators have left M. Proudhon no other “care” than

that of recording the fact, or marking, of “noting” in his treatise on political economy “the genesis

of the idea of value.” But he has still to explain to us the “genesis” of this proposal, to tell us

finally how this single individual, this Robinson [Crusoe], suddenly had the idea of making “to

his collaborators” a proposal of the type known and how these collaborators accepted it without

the slightest protest.

M. Proudhon does not enter into these genealogical details. He merely places a sort of historical

stamp upon the fact of exchange, by presenting it in the form of a motion, made by a third party,

that exchange be established.

That is a sample of the “historical and descriptive method” of M. Proudhon, who professes a

superb disdain for the “historical and descriptive methods” of the Adam Smiths and Ricardos.

Exchange has a history of its own. It has passed through different phases. There was a time, as in

the Middle Ages, when only the superfluous, the excess of production over consumption, was

exchanged.

There was again a time, when not only the superfluous, but all products, all industrial existence,

had passed into commerce, when the whole of production depended on exchange. How are we to

explain this second phase of exchange – marketable value at its second power?

M. Proudhon would have a reply ready-made: Assume that a man has “proposed to other men, his

collaborators in various functions,” to raise marketable value to its second power.

Finally, there came a time when everything that men had considered as inalienable became an

object of exchange, of traffic and could be alienated. This is the time when the very things which

till then had been communicated, but never exchanged; given, but never sold; acquired, but never

bought – virtue, love, conviction, knowledge, conscience, etc. – when everything, in short, passed

into commerce. It is the time of general corruption, of universal venality, or, to speak in terms of

political economy, the time when everything, moral or physical, having become a marketable

value, is brought to the market to be assessed at its truest value.

How, again, can we explain this new and last phase of exchange – marketable value at its third

power?

M. Proudhon would have a reply ready-made: Assume that a person has “proposed to other

persons, his collaborators in various functions,” to make a marketable value out of virtue, love,

etc., to raise exchange value to its third and last power.

We see that M. Proudhon‟s “historical and descriptive method” is applicable to everything, it

answers everything, explains everything. If it is a question above all of explaining historically

“the genesis of an economic idea,” it postulates a man who proposes to other men, “his

collaborators in various functions,” that they perform this act of genesis and that is the end of it.

We shall hereafter accept the “genesis” of exchange value as an accomplished act; it now remains

only to expound the relation between exchange value and use value. Let us hear what M.

Proudhon has to say:

“Economists have very well brought out the double character of value, but why

they have not pointed out with the same precision is its contradictory nature; there

is where our criticism begins.... It is a small thing to have drawn attention to this

surprising contrast between use value and exchange value, in which economists

have been wont to see only something very simple: we must show that this alleged

simplicity conceals a profound mystery into which it is our duty to penetrate.... In

technical terms, use value and exchange value stand in inverse ratio to each

other.”

If we have thoroughly grasped M. Proudhon‟s thought the following are the four points which he

sets out to establish:


1. Use value and exchange value form a “surprising contrast,” they are in opposition to each

other.

2. Use value and exchange value are in inverse ratio, in contradiction, to each other.

3. Economists have neither observed nor recognised either the opposition or the contradiction.

4. M. Proudhon‟s criticism begins at the end.

We, too, shall begin at the end, and, in order to clear the economists from M. Proudhon‟s

accusations, we shall let two sufficiently well-known economists speak for themselves.

SISMONDI: “It is the opposition between use value and exchange value to which

commerce has reduced everything, etc.” (Etudes, Volume II, p. 162, Brussels

edition)

LAUDERDALE: “In proportion as the riches of individuals are increased by an

augmentation of the value of any commodity, the wealth of the society is

generally diminished; and in proportion as the mass of individual riches is

diminished, by the diminution of the value of any commodity, its opulence is

generally increased.” (Recherches sur la nature et l‟origine de la richesse

publique, translated by Langentie de Lavaisse, Paris, 1808 [p. 33])

Sismondi founded on the opposition between use value and exchange value his principal doctrine,

according to which diminution in revenue is proportional to the increase in production.

Lauderdale founded his system on the inverse ratio of the two kinds of value, and his doctrine

was indeed so popular in Ricardo‟s time that the latter could speak of it as of something generally

known.

“It is through confounding the ideas of value and wealth, or riches that it has been

asserted, that by diminishing the quantity of commodities, that is to say, of the

necessaries, conveniences, and enjoyments of human life, riches may be

increased.” (Ricardo, Des Principles de l‟économie politique, translated by F. S.

Constancio, annotations by J. B. Say, Paris 1835, Volume II, Chapter “Sur la

valeur et les richesses.”)

We have just seen that the economists before M. Proudhon had “drawn attention” to the profound

mystery of opposition and contradiction. Let us now see how M. Proudhon explains this mystery

after the economists.

The exchange value of a product falls as the supply increases, the demand remaining the same; in

other words, the more abundant a product is relatively to the demand, the lower is its exchange

value, or price. Vice versa: The weaker the supply relatively to the demand, the higher rises the

exchange value or the price of the product supplied: in other words, the greater the scarcity in the

products supplied, relatively to the demand, the higher the prices. The exchange value of a

product depends upon its abundance or its scarcity; but always in relation to the demand. Take a

product that is more than scarce, unique of its kind if you will: this unique product will be more

than abundant, it will be superfluous, if there is no demand for it. On the other hand, take a

product multiplied into millions, it will always be scarce if it does not satisfy the demand, that is,

if there is too great a demand for it.

These are what we should almost call truisms, yet we have had to repeat them here in order to

render M. Proudhon‟s mysteries comprehensible.

“So that, following up the principle to its ultimate consequences, one would come

to the conclusion, the most logical in the world, that the things whose use is

indispensable and whose quantity is unlimited should be had for nothing, and

those whose utility is nil and whose scarcity is extreme should be of incalculable

worth. To cap the difficulty, these extremes are impossible in practice: on the one

hand, no human product could ever be unlimited in magnitude; on the other, even


the scarcest things must perforce be useful to a certain degree, otherwise they

would be quite valueless. Use value and exchange value are thus inexorably

bound up with each other, although by their nature they continually tend to be

mutually exclusive.” (Volume I, p. 39)

What caps M. Proudhon‟s difficulty? That he has simply forgotten about demand, and that a thing

can be scarce or abundant only in so far as it is in demand. The moment he leaves out demand, he

identifies exchange value with scarcity and use value with abundance. In reality, in saying that

things “whose utility is nil and scarcity extreme are of incalculable worth,” he is simply declaring

that exchange value is merely scarcity. “Scarcity extreme and utility nil” means pure scarcity.

“Incalculable worth” is the maximum of exchange value, it is pure exchange value. He equates

these two terms. Therefore exchange value and scarcity are equivalent terms. In arriving at these

alleged “extreme consequences,” M. Proudhon has in fact carried to the extreme, not the things,

but the terms which express them, and, in so doing, he shows proficiency in rhetoric rather than in

logic. He merely rediscovers his first hypotheses in all their nakedness, when he thinks he has

discovered new consequences. Thanks to the same procedure he succeeds in identifying use value

with pure abundance.

After having equated exchange value and scarcity, use value and abundance, M. Proudhon is

quite astonished not to find use value in scarcity and exchange value, nor exchange value in

abundance and use value; and seeing that these extremes are impossible in practice, he can do

nothing but believe in mystery. Incalculable worth exists for him, because buyers do not exist,

and he will never find any buyers, so long as he leaves out demand.

On the other hand, M. Proudhon‟s abundance seems to be something spontaneous. He completely

forgets that there are people who produce it, and that it is to their interest never to lose sight of

demand. Otherwise, how could M. Proudhon have said that things which are very useful must

have a very low price, or even cost nothing? On the contrary, he should have concluded that

abundance, the production of very useful things, should be restricted if their price, their exchange

value is to be raised.

The old vine-growers of France in petitioning for a law to forbid the planting of new vines; the

Dutch in burning Asiatic spices, in uprooting clove trees in the Moluccas, were simply trying to

reduce abundance in order to raise exchange value. During the whole of the Middle Ages this

same principle was acted upon, in limiting by laws the number of journeymen a single master

could employ and the number of implements he could use. (See Anderson, History of

Commerce.) [A. Anderson, An Historical and Chronological Deduction of the Origin of

Commerce from the Earliest Accounts to the Present Time. First edition appeared in London in

1764. p. 33]

After having represented abundance as use value and scarcity as exchange value – nothing indeed

is easier than to prove that abundance and scarcity are in inverse ratio – M. Proudhon identifies

use value with supply and exchange value with demand. To make the antithesis even more clear-

cut, he substitutes a new term, putting “estimation value” instead of exchange value. The battle

has now shifted its ground, and we have on one side utility (use value, supply), on the other side,

estimation (exchange value, demand).

Who is to reconcile these two contradictory forces? What is to be done to bring them into

harmony with each other? Is it possible to find in them even a single point of comparison?

“Certainly,” cries M. Proudhon, “there is one – free will. The price resulting from this battle

between supply and demand, between utility and estimation will not be the expression of eternal

justice.”

M. Proudhon goes on to develop this antithesis.

“In my capacity as a free buyer, I am judge of my needs, judge of the desirability

of an object, judge of the price I am willing to pay for it. On the other hand, in


your capacity as a free producer, you are master of the means of execution, and in

consequence, you have the power to reduce your expenses.” (Volume I, p. 41)

And as demand, or exchange value, is identical with estimation, M. Proudhon is led to say:

“It is proved that it is man‟s free will that gives rise to the opposition between use

value and exchange value. How can this opposition be removed, so long as free

will exists? And how can the latter be sacrificed without sacrificing mankind?”

(Volume I, p. 41)

Thus there is no possible way out. There is a struggle between two as it were incommensurable

powers, between utility and estimation, between the free buyer and the free producer.

Let us look at things a little more closely.

Supply does not represent exclusively utility, demand does not represent exclusively estimation.

Does not the demander also supply a certain product or the token representing all products – viz.,

money; and as supplier, does he not represent, according to M. Proudhon, utility or use value?

Again, does not the supplier also demand a certain product or the token representing all products

– viz., money? And does he not thus become the representative of estimation, of estimation value

or of exchange value?

Demand is at the same time a supply, supply is at the same time a demand. Thus M. Proudhon‟s

antithesis, in simply identifying supply and demand, the one with utility, the other with

estimation, is based only on a futile abstraction.

What M. Proudhon calls use value is called estimation value by other economists, and with just as

much right. We shall quote only Storch (Cours d‟économie politique, Paris 1823, pp. 48 and 49).

According to him, needs are the things for which we feel the need; values are things to which we

attribute value. Most things have value only because they satisfy needs engendered by estimation.

The estimation of our needs may change; therefore the utility of things, which expresses only the

relation of these things to our needs, may also change. Natural needs themselves are continually

changing. Indeed, what could be more varied than the objects which form the staple food of

different peoples!

The conflict does not take place between utility and estimation; it takes place between the

marketable value demanded by the supplier and the marketable value supplied by the demander.

The exchange value of the product is each time the resultant of these contradictory appreciations.

In final analysis, supply and demand bring together production and consumption, but production

and consumption based on individual exchanges.

The product supplied is not useful in itself. It is the consumer who determines its utility. And

even when its quality of being useful is admitted, it does not exclusively represent utility. In the

course of production, it has been exchanged for all the costs of production, such as raw materials,

wages of workers, etc., all of which are marketable values. The product, therefore, represents, in

the eyes of the producer, a sum total of marketable values. What he supplies is not only a useful

object, but also and above all a marketable value.

As to demand, it will only be effective on condition that it has means of exchange at its disposal.

These means are themselves products, marketable value.

In supply and demand, then, we find on the one hand a product which has cost marketable values,

and the need to sell; on the other, means which have cost marketable values, and the desire to

buy.

M. Proudhon opposes the free buyer to the free producer. To the one and to the other he attributes

purely metaphysical qualities. It is this that makes him say: “It is proved that it is man‟s free will

that gives rise to the opposition between use value and exchange value.” (Vol. I, p. 41)


The producer, the moment he produces in a society founded on the division of labour and on

exchange (and that is M. Proudhon‟s hypothesis), is forced to sell. M. Proudhon makes the

producer master of the means of production; but he will agree with us that his means of

production do not depend on free will. Moreover, many of these means of production are

products which he gets from the outside, and in modern production he is not even free to produce

the amount he wants. The actual degree of development of the productive forces compels him to

produce on such or such a scale.

The consumer is no freer than the producer. His judgment depends on his means and his needs.

Both of these are determined by his social position, which itself depends on the whole social

organization. True, the worker who buys potatoes and the kept woman who buys lace both follow

their respective judgments. But the difference in their judgments is explained by the difference in

the positions which they occupy in the world, and which themselves are the product of social

organization.

Is the entire system of needs on estimation or on the whole organization of production? Most

often, needs arise directly from production or from a state of affairs based on production. Thus, to

choose another example, does not the need for lawyers suppose a given civil law which is but the

expression of a certain development of property, that is to say, of production?

It is not enough for M. Proudhon to have eliminated the elements just mentioned from the relation

of supply and demand. He carries abstraction to the furthest limits when he fuses all producers

into one single producer, all consumers into one single consumer, and sets up a struggle between

these two chimerical personages. But in the real world, things happen otherwise. The competition

among the suppliers and the competition among the demanders form a necessary part of the

struggle between buyers and sellers, of which marketable value is the result.

After having eliminated competition and the cost of production, M. Proudhon can at his ease

reduce the formula of supply and demand to an absurdity.

“Supply and demand,” he says, “are merely two ceremonial forms that serve to

bring use value and exchange value face to face, and to lead to their

reconciliation. They are the two electric poles which, when connected, must

produce the phenomenon of affinity called exchange.” (Volume I, pp. 49 and 50)

One might as well say that exchange is merely a “ceremonial form” for introducing the consumer

to the object of consumption. One might as well say that all economic relations are “ceremonial

forms” serving immediate consumption as go-betweens. Supply and demand are neither more nor

less relations of a given production than are individual exchanges.

What, then, does all M. Proudhon‟s dialectic consist in? In the substitution for use value and

exchange value, for supply and demand, of abstract and contradictory notions like scarcity and

abundance, utility and estimation, one producer and one consumer, both of them knights of free

will.

And what was he aiming at?

At arranging for himself a means of introducing later on one of the elements he had set aside, the

cost of production, as the synthesis of use value and exchange value. And it is thus that in his eyes

the cost of production constitutes synthetic value or constituted value.

§ 2. Constituted Value or Synthetic Value

Value (marketable value) is the corner-stone of the economic structure. “Constituted” value is the

corner-stone of the system of economic contradictions.

What then is this “constituted value” which is all M. Proudhon has discovered in political

economy?

Once utility is admitted, labour is the source of all value. The measure of labour is time. The

relative value of products is determined by the labour time required for their production. Price is


the monetary expression of the relative value of a product. Finally, the constituted value of a

product is purely and simply the value which is constituted by the labour time incorporated in it.

Just as Adam Smith discovered the division of labour, so he, M. Proudhon, claims to have

discovered “constituted value.” This is not exactly “something unheard of,” but then it must be

admitted that there is nothing unheard of in any discovery of economic science. M. Proudhon,

who fully appreciates the importance of his own invention, seeks nevertheless to tone down the

merit therefore “in order to reassure the reader as to his claims to originality, and to win over

minds whose timidity renders them little favourable to new ideas.” But in apportioning the

contribution made by each of his predecessors to the understanding of value, he is forced to

confess openly that the largest portion, the lion‟s share, of the merit falls to himself.

“The synthetic idea of value had been vaguely perceived by Adam Smith.... But

with Adam Smith the idea of value was entirely intuitive. Now, society does not

change its habits merely on the strength of intuitions: its decisions are made only

on the authority of facts. The antinomy had to be stated more palpably and more

clearly: J.B. Say was its chief interpreter.”

Here, in a nutshell, is the history of the discovery of synthetic value: Adam Smith – vague

intuition; J. B. Say – antinomy; M. Proudhon – constituting and “constituted” truth. And let there

be no mistake about it: all the other economists, from Say to Proudhon, have merely been

trudging along in the rut of antinomy.

“It is incredible that for the last 40 years so many men of sense should have fumed

and fretted at such a simple idea. But no, values are compared without there being

any point of comparison between them and with no unit of measurements; this,

rather than embrace the revolutionary theory of equality, is what the economists of

the 19th century are resolved to uphold against all comers. What will posterity say

about it?” (Volume I, p. 68)

Posterity, so abruptly invoked, will begin by getting muddled over the chronology. It is bound to

ask itself: are not Ricardo and his school economists of the 19th century? Ricardo‟s system,

putting as a principle that “the relative value of commodities corresponds exclusively to their

production,” dates from 1817. Ricardo is the head of a whole school dominant in England since

the Restoration. [The Restoration began after the termination of the Napoleonic wars and the

restoration of the Bourbon dynasty in France in 1815.] The Ricardian doctrine summarizes

severely, remorselessly, the whole of the English bourgeoisie. “What will posterity say about it?”

It will not say that M. Proudhon did not know Ricardo, for he talks about him, he talks at length

about him, he keeps coming back to him, and concludes by calling his system “trash.” If ever

posterity does interfere, it will say perhaps that M. Proudhon, afraid of offending his readers‟

Anglophobia, preferred to make himself the responsible editor of Ricardo‟s ideas. In any case, it

will think it very naive that M. Proudhon should give as a “revolutionary theory of the future”

what Ricardo expounded scientifically as the theory of present-day society, of bourgeois society,

and that he should thus take for the solution of the antinomy between utility and exchange value

what Ricardo and his school presented long before him as the scientific formula of one single side

of this antinomy, that of exchange value. But let us leave posterity alone once and for all, and

confront M. Proudhon with his predecessor Ricardo. Here are some extracts from this author

which summarize his doctrine on value:

“Utility then is not the measure of exchangeable value, although it is absolutely

essential to it.” (Volume I, p. 3, Principles de l‟économie politique, etc., translated

from the English by F. S. Constancio, Paris 1835)

“Possessing utility, commodities derive their exchangeable value from two

sources: from their scarcity, and from the quantity of labour required to obtain

them. There are some commodities, the value of which is determined by their


scarcity alone. No labour can increase the quantity of such goods, and therefore

their value cannot be lowered by an increased supply. Some rare statues and

pictures, scarce books... are all of this description. Their value... varies with the

varying wealth and inclinations of those who are desirous to possess them.”

(Volume I, pp. 4 and 5, l. c.) “These commodities, however, form a very small

part of the mass of commodities daily exchanged in the market. By far the greatest

part of these goods which are the objects of desire, are procured by labour; and

they may be multiplied, not in one country alone, but in many, almost without any

assignable limit, if we are disposed to bestow the labour necessary to obtain

them.” (Volume I, pp. 5, l. c.)

“In speaking then of commodities, of their exchangeable value, and of the laws

which regulate their relative prices, we mean always such commodities only as

can be increased in quantity by the exertion of human industry, and on the

production of which competition operates without restraint.” (Volume I, p .5)

Ricardo quotes Adam Smith, who, according to him, “so accurately defined the original source of

exchangeable value” (Adam Smith, Wealth of Nations, Book I, Chap 5 [An Inquiry into the

Nature and Causes of the Wealth of Nations, first edition appearing in London, 1776]), and he

adds:

“That this (i.e., labour time) is really the foundation of the exchangeable value of

all things, excepting those which cannot be increased by human industry, is a

doctrine of the utmost importance in political economy; for from no source do so

many errors, and so much difference of opinion in that science proceed, as from

the vague ideas which are attached to the word value.” (Volume I, p. 8)

“If the quantity of labour realised in commodities regulate their exchangeable value, every

increase of the quantity of labour must augment the value of that commodity on which it is

exercised, as every diminution must lower it.” (Volume I, p. 8)

Ricardo goes on to reproach Smith:

1. With having “himself erected another standard measure of value” than labour.

“Sometimes he speaks of corn, at other times of labour, as a standard measure; not

the quantity of labour bestowed on the production of any object, but the quantity it

can command in the market.” (Vol. I, pp. 9 and 10)

2. With having “admitted the principle without qualification and at the same time

restricted its application to that early and rude state of society, which precedes

both the accumulation of stock and the appropriation of land.” (Vol. I, p. 21)

Ricardo sets out to prove that the ownership of land, that is, ground rent, cannot change the

relative value of commodities and that the accumulation of capital has only a passing and

fluctuating effect on the relative values determined by the comparative quantity of labour

expended on their production. In support of this thesis, he gives his famous theory of ground rent,

analyses capital, and ultimately finds nothing in it but accumulated labour. Then he develops a

whole theory of wages and profits, and proves that wages and profits rise and fall in inverse ratio

to each other, without affecting the relative value of the product. He does not neglect the

influence that the accumulation of capital and its different aspects (fixed capital and circulating

capital), as also the rate of wages, can have on the proportional value of products. In fact, they are

the chief problems with which Ricardo is concerned.


“Economy in the use of labour never fails to reduce the relative value* of a

commodity, whether the saving be in the labour necessary to the manufacture of

the commodity itself, or in that necessary to the formation of the capital, by the

aid of which it is produced.” (Vol. I, p. 28) “Under such circumstance the value of

the deer, the produce of the hunter‟s day‟s labour, would be exactly equal to the

value of the fish, the produce of the fisherman‟s day‟s labour. The comparative

value of the fish and the game would be entirely regulated by the quantity of

labour realised in each, whatever might be the quantity of production, or however

high or low general wages or profits might be.” (Vol. I, p. 28) “In making labour

the foundation of the value of commodities and the comparative quantity of labour

which is necessary to their production, the rule which determines the respective

quantities of goods which shall be given in exchange for each other, we must not

be supposed to deny the accidental and temporary deviations of the actual or

market price of commodities from this, their primary and natural price.” (Vol. I, p.

105, l. c.) “It is the cost of production which must ultimately regulate the price of

commodities, and not, as has been often said, the proportion between supply and

demand.” (Vol. II, p. 253)

Lord Lauderdale had developed the variations of exchange value according to the law of supply

and demand, or of scarcity and abundance relatively to demand. In his opinion the value of a

thing can increase when its quantity decreases or when the demand for it increases; it can

decrease owing to an increase of its quantity or owing to the decrease in demand. Thus the value

of a thing can change through eight different causes, namely, four causes that apply to money or

to any other commodity which serves as a measure of its value. Here is Ricardo‟s refutation:

“Commodities which are monopolised, either by an individual, or by a company,

vary according to the law which Lord Lauderdale has laid down: they fall in

proportion as the sellers augment their quantity, and rise in proportion to the

eagerness of the buyers to purchase them; their price has no necessary connexion

with their natural value; but the prices of commodities, which are subject to

competition, and whose quantity may be increased in any moderate degree, will

ultimately depend, not on the state of demand and supply, but on the increased or

diminished cost of their production.” (Vol. II, p. 259)

We shall leave it to the reader to make the comparison between this simple, clear, precise

language of Ricardo‟s and M. Proudhon‟s rhetorical attempts to arrive at the determination of

relative value by labour time.

Ricardo shows us the real movement of bourgeois production, which constitutes value. M.

Proudhon, leaving the real movement out of account, “fumes and frets” in order to invent new

processes and to achieve the reorganisation of the world on a would-be new formula, which

formula is no more than the theoretical expression of the real movement which exists and which

is so well described by Ricardo. Ricardo takes his starting point from present-day society to

demonstrate to us how it constitutes value – M. Proudhon takes constituted value as his starting

point to construct a new social world with the aid of this value. For him, M. Proudhon,

constituted value must move around and become once more the constituting factor in a world

already completely constituted according to this mode of evaluation. The determination of value

by labour time is, for Ricardo, the law of exchange value; for M. Proudhon, it is the synthesis of

* Ricardo, as is well known, determines the value of a commodity by the quantity of labour necessary for its

production. Owing, however, to the prevailing form of exchange in every mode of production based on production of

commodities, including therefore the capitalist mode of production, this value is not expressed directly in quantities of

labour but in quantities of some other commodity. The value of a commodity expressed in a quantity of some other

commodity (whether money or not) is termed by Ricardo its relative value. [Note by Engels to 1885 German edition]


use value and exchange value. Ricardo‟s theory of values is the scientific interpretation of actual

economic life; M. Proudhon‟s theory of values is the utopian interpretation of Ricardo‟s theory.

Ricardo establishes the truth of his formula by deriving it from all economic relations, and by

explaining in this way all phenomena, even those like ground rent, accumulation of capital and

the relation of wages to profits, which at first sight seems to contradict it; it is precisely that

which makes his doctrine a scientific system: M. Proudhon, who has rediscovered this formula of

Ricardo‟s by means of quite arbitrary hypotheses, is forced thereafter to seek out isolated

economic facts which he twists and falsifies to pass them off as examples, already existing

applications, beginning of realization of his regenerating idea. (See our §3. Application of

Constituted Value)

Now let us pass on to the conclusions M. Proudhon draws from value constituted (by labour

time).

– A certain quantity of labour is equivalent to the product created by this same quantity of

labour.

– Each day‟s labour is worth as much as another day‟s labour; that is to say, if the quantities are

equal, one man‟s labour is worth as much as another man‟s labour: there is no qualitative

difference. With the same quantity of work, one man‟s product can be given in exchange for

another man‟s product. All men are wage workers getting equal pay for an equal time of work.

Perfect equality rules the exchanges.

Are these conclusions the strict, natural consequences of value “constituted” or determined by

labour time?

If the relative value of a commodity is determined by the quantity of labour required to produce

it, it follows naturally that the relative value of labour, or wages, is likewise determined by the

quantity of labour needed to produce the wages. Wages, that is, the relative value or the price of

labour, are thus determined by the labour time needed to produce all that is necessary for the

maintenance of the worker.

“Diminish the cost of production of hats, and their price will ultimately fall to

their own new natural price, although the demand should be doubled, trebled, or

quadrupled. Diminish the cost of subsistence of men, by diminishing the natural

price of food and clothing, by which life is sustained, and wages will ultimately

fall, notwithstanding the demand for labourers may very greatly increase.”

(Ricardo, Vol. II, p. 253)

Doubtless, Ricardo‟s language is as cynical as can be. To put the cost of manufacture of hats and

the cost of maintenance of men on the same plane is to turn men into hats. But do not make an

outcry at the cynicism of it. The cynicism is in the facts and not in the words which express the

facts. French writers like M.M. Droz, Blanqui, Rossi and others take an innocent satisfaction in

proving their superiority over the English economists, by seeking to observe the etiquette of a

“humanitarian” phraseology; if they reproach Ricardo and his school for their cynical language, it

is because it annoys them to see economic relations exposed in all their crudity, to see the

mysteries of the bourgeoisie unmasked.

To sum up: Labour, being itself a commodity, is measured as such by the labour time needed to

produce the labour-commodity. And what is needed to produce this labour-commodity? Just

enough labour time to produce the objects indispensable to the constant maintenance of labour,

that is, to keep the worker alive and in a condition to propagate his race. The natural price of

labour is no other than the minimum wage.* If the current rate of wages rises above this natural

* The thesis that the “natural,” i.e., normal, price of labour power coincides with the minimum wage, i.e., with the

equivalent in value of the means of subsistence absolutely indispensable for the life and procreation of the worker, was

first put forward by me in Outlines of a Critique of Political Economy (Deutsch-Französische Jahrbücher, Paris, 1844)


price, it is precisely because the law of value put as a principle by M. Proudhon happens to be

counterbalanced by the consequences of the varying relations of supply and demand. But the

minimum wage is nonetheless the centre towards which the current rates of wages gravitate.

Thus relative value, measured by labour time, is inevitably the formula of the present

enslavement of the worker, instead of being, as M. Proudhon would have it, the “revolutionary

theory” of the emancipation of the proletariat.

Let us now see to what extent the application of labour time as a measure of value is incompatible

with the existing class antagonism and the unequal distribution of the product between the

immediate worker and the owner of accumulated labour.

Let us take a particular product: broadcloth, which has required the same quantity of labour as the

linen.

If there is an exchange of these two products, there is an exchange of equal quantities of labour.

In exchanging these equal quantities of labour time, one does not change the reciprocal position

of the producers, any more than one changes anything in the situation of the workers and

manufacturers among themselves. To say that this exchange of products measured by labour time

results in an equality of payment for all the producers is to suppose that equality of participation

in the product existed before the exchange. When the exchange of broadcloth for linen has been

accomplished, the producers of broadcloth will share in the linen in a proportion equal to that in

which they previously shared in the broadcloth.

M. Proudhon‟s illusion is brought about by his taking for a consequence what could be at most

but a gratuitous supposition.

Let us go further.

Does labour time, as the measure of value, suppose at least that the days are equivalent, and that

one man‟s day is worth as much as another‟s? No.

Let us suppose for a moment that a jeweller‟s day is equivalent to three days of a weaver; the fact

remains that any change in the value of jewels relative to that of woven materials, unless it be the

transitory result of the fluctuations of supply and demand, must have as its cause a reduction or an

increase in the labour time expended in the production of one or the other. If three working days

of different workers be related to one another in the ratio of 1:2:3, then every change in the

relative value of their products will be a change in this same proportion of 1:2:3. Thus values can

be measured by labour time, in spite of the inequality of value of different working days; but to

apply such a measure we must have a comparative scale of the different working days: it is

competition that sets up this scale.

Is your hour‟s labour worth mine? That is a question which is decided by competition.

Competition, according to an American economist, determines how many days of simple labour

are contained in one day‟s compound labour. Does not this reduction of days of compound labour

to days of simple labour suppose that simple labour is itself taken as a measure of value? If the

mere quantity of labour functions as a measure of value regardless of quality, it presupposes that

simple labour has become the pivot of industry. It presupposes that labour has been equalized by

the subordination of man to the machine or by the extreme division of labour; that men are

effaced by their labour; that the pendulum of the clock has become as accurate a measure of the

and in The Condition of the Working Class in England in 1844. As seen here, Marx at that time accepted the thesis.

Lassalle took it over from both of us. Although, however, in reality wages have a constant tendency to approach the

minimum, the above thesis is nevertheless incorrect. The fact that labour is regularly and on the average paid below its

value cannot alter its value. In Capital, Marx has put the above thesis right (Section on Buying and Selling of Labour

Power) and also (Chapter XXV: The General Law of Capitalist Accumulation) analysed the circumstances which

permit capitalist production to depress the price of labour power more and more below its value. [Note by Engels to

1885 German edition]


relative activity of two workers as it is of the speed of two locomotives. Therefore, we should not

say that one man‟s hour is worth another man‟s hour, but rather that one man during an hour is

worth just as much as another man during an hour. Time is everything, man is nothing; he is, at

the most, time‟s carcass. Quality no longer matters. Quantity alone decides everything; hour for

hour, day for day; but this equalising of labour is not by any means the work of M. Proudhon‟s

eternal justice; it is purely and simply a fact of modern industry.

In the automatic workshop, one worker‟s labour is scarcely distinguishable in any way from

another worker‟s labour: workers can only be distinguished one from another by the length of

time they take for their work. Nevertheless, this quantitative difference becomes, from a certain

point of view, qualitative, in that the time they take for their work depends partly on purely

material causes, such as physical constitution, age and sex; partly on purely negative moral

causes, such as patience, imperturbability, diligence. In short, if there is a difference of quality in

the labour of different workers, it is at most a quality of the last kind, which is far from being a

distinctive speciality. This is what the state of affairs in modern industry amounts to in the last

analysis. It is upon this equality, already realised in automatic labour, that M. Proudhon wields

his smoothing-plane of “equalisation,” which he means to establish universally in “time to

come!”

All the “equalitarian” consequences which M. Proudhon deduces from Ricardo‟s doctrine are

based on a fundamental error. He confounds the value of commodities measured by the quantity

of labour embodied in them with the value of commodities measured by “the value of labour.” If

these two ways of measuring the value of commodities were equivalent, it could be said

indifferently that the relative value of any commodity is measured by the quantity of labour

embodied in it; or that it is measured by the quantity of labour it can buy; or again that it is

measured by the quantity of labour which can acquire it. But this is far from being so. The value

of labour can no more serve as a measure of value than the value of any other commodity. A few

examples will suffice to explain still better what we have just stated.

If a quarter of corn cost two days‟ labour instead of one, it would have twice its original value;

but it would not set in operation double the quantity of labour, because it would contain no more

nutritive matter than before. Thus the value of the corn, measured by the quantity of labour used

to produce it, would have doubled; but measured either by the quantity of labour it can buy or the

quantity of labour with which it can be bought, it would be far from having doubled. On the other

hand, if the same labour produced twice as many clothes as before, their relative value would fall

by half; but, nevertheless, this double quantity of clothing would not thereby be reduced to

disposing over only half the quantity of labour, nor could the same labour command the double

quantity of clothing; for half the clothes would still go on rendering the worker the same service

as before.

Thus it is going against economic facts to determine the relative value of commodities by the

value of labour. It is moving in a vicious circle, it is to determine relative value by a relative value

which itself needs to be determined.

It is beyond doubt that M. Proudhon confuses the two measures, measure by the labour time

needed for the production of a commodity and measure by the value of the labour.

“Any man‟s labour,” he says, “can buy the value it represents.”

Thus, according to him, a certain quantity of labour embodied in a product is equivalent to the

worker‟s payment, that is, to the value of labour. It is the same reasoning that makes him confuse

cost of production with wages.

“What are wages? They are the cost price of corn, etc., the integral price of all

things. Let us go still further. Wages are the proportionality of the elements which

compose wealth.”

What are wages? They are the value of labour.


Adam Smith takes as the measure of value, now the time of labour needed for the production of a

commodity, now the value of labour. Ricardo exposes this error by showing clearly the disparity

of these two ways of measuring. M. Proudhon goes one better than Adam Smith in error by

identifying the two things which the latter had merely put in juxtaposition.

It is in order to find the proper proportion in which workers should share in the products, or, in

other words, to determine the relative value of labour, that M. Proudhon seeks a measure for the

relative value of commodities. To find out the measure for the relative value of commodities he

can think of nothing better than to give as the equivalent of a certain quantity of labour the sum

total of the products it has created, which is as good as supposing that the whole of society

consists merely of workers who receive their own produce as wages. In the second place, he takes

for granted the equivalence of the working days of different workers. In short, he seeks the

measure of the relative value of commoditising order to arrive at equal payment for the workers,

and he takes the equality of wages as an already established fact, in order to go off on the search

for the relative value of commodities. What admirable dialectics!

“Say and the economists after him have observed that labour being itself subject

to valuation, being a commodity like any other commodity, it is moving in a

vicious circle to treat it as the principle and the determining cause of value. In so

doing, these economists, if they will allow me to say so, show a prodigious

carelessness. Labour is said to have value not as a commodity itself, but in view of

the values which it is supposed potentially to contain. The value of labour is a

figurative expression, an anticipation of the cause for the effect. It is a fiction of

the same stamp as the productivity of capital. Labour produces, capital has value...

By a sort of ellipsis one speaks of the value of labour.... Labour like liberty ... is a

thing vague and indeterminate by nature, but defined qualitatively by its object,

that is to say, it becomes a reality by the product.”

“But is there any need to dwell on this? The moment the economist (read M.

Proudhon) changes the name of things, vera rerum vocabula (the true name of

things), he is implicitly confessing his impotence and proclaiming himself not

privy to the cause.” (Proudhon, Vol. I, p. 188)

We have seen that M. Proudhon makes the value of labour the “determining cause” of the value

of products to such an extent that for him wages, the official name for the “value of labour,” form

the integral price of all things: that is why Say‟s objection troubles him. In labour as a

commodity, which is a grim reality, he sees nothing but a grammatical ellipsis. Thus the whole of

existing society, founded on labour as a commodity, is henceforth founded on a poetic licence, a

figurative expression. If society wants to “eliminate all the drawbacks” that assail it, well, let it

eliminate all the ill-sounding terms, change the language; and to this end it has only to apply to

the Academy for a new edition of its dictionary. After all that we have just seen, it is easy for us

to understand why M. Proudhon, in a work on political economy, has to enter upon long

dissertations on etymology and other parts of grammar. Thus he is still learnedly discussing the

antiquated derivation of servus [a slave, servant] from servare [To preserve]. These philological

dissertations have a deep meaning, an esoteric meaning – they form an essential part of M.

Proudhon‟s argument.

Labour,* inasmuch as it is bought and sold, is a commodity like any other commodity, and has, in

consequence, an exchange value. But the value of labour, or labour as a commodity, produces as

little as the value of wheat, or wheat as a commodity, serves as food.

* In the copy Marx presented to N. Utina in 1876 after this word “labour” Marx adds “labour power;” this addition is

found in the 1896 French edition.


Labour “is worth” more or less, according to whether food commodities are more or less dear,

whether the supply and demand of hands exist to such or such a degree, etc., etc.

Labour is not a “vague thing”; it is always some definite labour, it is never labour in general that

is bought and sold. It is not only labour that is qualitatively defined by the object; but also the

object which is determined by the specific quality of labour.

Labour, in so far as it is bought and sold, is itself a commodity. Why is it bought? “Because of the

values it is supposed potentially to contain.” But if a certain thing is said to be a commodity, there

is no longer any question as to the reason why it is bought, that is, as to the utility to be derived

from it, the application to be made of it. It is a commodity as an object of traffic. All M.

Proudhon‟s arguments are limited to this: labour is not bought as an immediate object of

consumption. No, it is bought as an instrument of production, as a machine would be bought. As

a commodity, labour has no value and does not produce. M. Proudhon might just as well have

said that there is no such thing as a commodity, since every commodity is obtained merely for

some utilitarian purpose, and never as a commodity in itself.

In measuring the value of commodities by labour, M. Proudhon vaguely glimpses the

impossibility of excluding labour from this same measure, in so far as labour has a value, as

labour is a commodity. He has a misgiving that it is turning the wage minimum into the natural

and normal price of immediate labour, that it is accepting the existing state of society. So, to get

away from this fatal consequence, he faces about and asserts that labour is not a commodity, that

it cannot have value. He forgets that he himself has taken the value of labour as a measure, he

forgets that his whole system rests on labour as a commodity, on labour which is bartered,

bought, sold, exchanged for produce, etc., on labour, in fact, which is an immediate source of

income for the worker. He forgets everything.

To save his system, he consents to sacrifice its basis.

Et propter vitam vivendi perdere causas! [And for the sake of life to lose the

reasons for living]

We now come to a new definition of “constituted value.”

“Value is the proportional relation of the products which constitute wealth.”

Let us note in the first place that the single phrase “relative or exchange value” implies the idea of

some relation in which products are exchanged reciprocally. By giving the name “proportional

relation” to this relation, no change is made in the relative value, except in the expression. Neither

the depreciation nor the enhancement of the value of a product destroys its quality of being in

some “proportional relation” with the other products which constitute wealth.

Why then this new term, which introduces no new idea?

“Proportional relation” suggests many other economic relations, such as proportionality in

production, the true proportion between supply and demand, etc., and M. Proudhon is thinking of

all that when he formulates this didactic paraphrase of marketable value.

In the first place, the relative value of products being determined by the comparative amount of

labour used in the production of each of them, proportional relations, applied to this special case,

stand for the respective quota of products which can be manufactured in a given time, and which

in consequence are given in exchange for one another.

Let us see what advantage M. Proudhon draws from this proportional relation.

Everyone knows that when supply and demand are evenly balanced, the relative value of any

product is accurately determined by the quantity of labour embodied in it, that is to say, that this

relative value expresses the proportional relation precisely in the sense we have just attached to it.

M. Proudhon inverts the order of things. Begin, he says, by measuring the relative value of a

product by the quantity of labour embodied in it, and supply and demand will infallibly balance

one another. Production will correspond to consumption, the product will always be


exchangeable. Its current price will express exactly its true value. Instead of saying like everyone

else: when the weather is fine, a lot of people are to be seen going out for a walk. M. Proudhon

makes his people go out for a walk in order to be able to ensure them fine weather.

What M. Proudhon gives as the consequence of marketable value determined a priori by labour

time could be justified only by a law couched more or less in the following terms:

Products will in future be exchanged in the exact ratio of the labour time they have cost.

Whatever may be the proportion of supply to demand, the exchange of commodities will always

be made as if they had been produced proportionately to the demand. Let M. Proudhon take it

upon himself to formulate and lay down such a law, and we shall relieve him of the necessity of

giving proofs. If, on the other hand, he insists on justifying his theory, not as a legislator, but as

an economist, he will have to prove that the time needed to create a commodity indicates exactly

the degree of its utility and marks its proportional relation to the demand, and in consequence, to

the total amount of wealth. In this case, if a product is sold at a price equal to its cost of

production, supply and demand will always be evenly balanced; for the cost of production is

supposed to express the true relation between supply and demand.

Actually, M. Proudhon sets out to prove that labour time needed to create a product indicates its

true proportional relation to needs, so that the things whose production costs the least time are the

most immediately useful, and so on, step by step. The mere production of a luxury object proves

at once, according to this doctrine, that society has spare time which allows it to satisfy a need for

luxury.

M. Proudhon finds the very proof of his thesis in the observation that the most useful things cost

the least time to produce, that society always begins with the easiest industries and successively

“starts on the production of objects which cost more labour time and which correspond to a

higher order of needs.”

M. Proudhon borrows from M. Dunoyer the example of extractive industry – fruit-gathering,

pasturage, hunting, fishing, etc. – which is the simplest, the least costly of industries, and the one

by which man began “the first day of his second creation.” The first day of his first creation is

recorded in Genesis, which shows God as the world‟s first manufacturer.

Things happen in quite a different way from what M. Proudhon imagines. The very moment

civilisation begins, production begins to be founded on the antagonism of orders, estates, classes,

and finally on the antagonism of accumulated labour and actual labour. No antagonism, no

progress. This is the law that civilisation has followed up to our days. Till now the productive

forces have been developed by virtue of this system of class antagonisms. To say now that,

because all the needs of all the workers were satisfied, men could devote themselves to the

creation of products of a higher order – to more complicated industries – would be to leave class

antagonism out of account and turn all historical development upside down. It is like saying that

because, under the Roman emperors, muraena were fattened in artificial fishponds, therefore

there was enough to feed abundantly the whole Roman population. Actually, on the contrary, the

Roman people had not enough to buy bread with, while the Roman aristocrats had slaves enough

to throw as fodder to the muraena.

The price of food has almost continuously risen, while the price of manufactured and luxury

goods has almost continuously fallen. Take the agricultural industry itself; the most indispensable

objects, like corn, meat, etc., rise in price, while cotton, sugar, coffee, etc., fall in a surprising

proportion. And even among comestibles proper, the luxury articles, like artichokes, asparagus,

etc., are today relatively cheaper than foodstuffs of prime necessity. In our age, the superfluous is

easier to produce than the necessary. Finally, at different historical epochs, the reciprocal price

relations are not only different, but opposed to one another. In the whole of the Middle Ages,

agricultural products were relatively cheaper than manufactured products; in modern times they


are in inverse ratio. Does this mean that the utility of agricultural products has diminished since

the Middle Ages?

The use of products is determined by the social conditions in which the consumers find

themselves placed, and these conditions themselves are based on class antagonism.

Cotton, potatoes and spirits are objects of the most common use. Potatoes have engendered

scrofula; cotton has to a great extent driven out flax and wool, although wool and flax are, in

many cases, of greater utility, if only from the point of view of hygiene; finally, spirits have got

the upper hand of beer and wine, although spirits used as an alimentary substance are everywhere

recognised to be poison. For a whole century, governments struggled in vain against the European

opium; economics prevailed, and dictated its orders to consumption.

Why are cotton, potatoes and spirits the pivots of bourgeois society? Because the least amount of

labour is needed to produce them, and, consequently, they have the lowest price. Why does the

minimum price determine the maximum consumption? Is it by any chance because of the

absolute utility of these objects, their intrinsic utility, their utility insomuch as they correspond, in

the most useful manner, in the needs of the worker as a man, and not to the man as a worker? No,

it is because in a society founded on poverty the poorest products have the fatal prerogative of

being used by the greatest number.

To say now that because the least costly things are in greater use, they must be of greater utility,

is saying that the wide use of spirits, because of their low cost of production, is the most

conclusive proof of their utility; it is telling the proletarian that potatoes are more wholesome for

him than meat; it is accepting the present state of affairs; it is, in short, making an apology, with

M. Proudhon, for a society without understanding it.

In a future society, in which class antagonism will have ceased, in which there will no longer be

any classes, use will no longer be determined by the minimum time of production; but the time of

production devoted to different articles will be determined by the degree of their social utility.

To return to M. Proudhon‟s thesis: the moment the labour time necessary for the production of an

article ceases to be the expression of its degree of utility, the exchange value of this same article,

determined beforehand by the labour time embodied in it, becomes quite usable to regulate the

true relation of supply to demand, that is, the proportional relation in the sense M. Proudhon at

the moment attributes to it.

It is not the sale of a given product at the price of its cost of production that constitutes the

“proportional relation” of supply to demand, or the proportional quota of this product relatively to

the sum total of production; it is the variations in supply and demand that show the producer what

amount of a given commodity he must produce in order to receive in exchange at least the cost of

production. And as these variations are continually occurring, there is also a continual movement

of withdrawal and application of capital in the different branches of industry.

“It is only in consequence of such variations that capital is apportioned precisely,

in the requisite abundance and no more, to the production of the different

commodities which happen to be in demand. With the rise or fall of price, profits

are elevated above, or depressed below their general level, and capital is either

encouraged to enter into, or is warned to depart from, the particular employment

in which the variation has taken place.”

“When we look at the markets of a large town, and observe how regularly they are supplied both

with home and foreign commodities, in the quantity in which they are required, under all the

circumstances of varying demand, arising from the caprice of taste, or a change in the amount of

population, without often producing either the effects of a glut from a too abundant supply, or an

enormously high price from the supply being unequal to the demand, we must confess that the

principle which apportions capital to each trade in the precise amount that is required, is more

active than is generally supposed.” (Ricardo, Vol. I, pp. 105 and 108)


If M. Proudhon admits that the value of products is determined by labour time, he should equally

admit that it is the fluctuating movement alone that in societies founded on individual exchanges

make labour the measure of value. There is no ready-made constituted “proportional relation,”

but only a constituting movement.

We have just seen in what sense it is correct to speak of “proportion” as of a consequence of

value determined by labour time. We shall see now how this measure by time, called by M.

Proudhon the “law of proportion,” becomes transformed into a law of disproportion.

Every new invention that enables the production in one hour of that which has hitherto been

produced in two hours depreciates all similar products on the market. Competition forces the

producer to sell the product of two hours as cheaply as the product of one hour. Competition

carries into effect the law according to which the relative value of a product is determined by the

labour time needed to produce it. Labour time serving as the measure of marketable value

becomes in this way the law of the continual depreciation of labour. We will say more. There will

be depreciation not only of the commodities brought into the market, but also of the instruments

of production and of whole plants. This fact was already pointed out by Ricardo when he said:

“By constantly increasing the facility of production, we constantly diminish the

value of some of the commodities before produced.” (Vol. II, p. 59)

Sismondi goes further. He sees in this “value constituted” by labour time, the source of all the

contradictions of modern industry and commerce.

“Mercantile value,” he says, “is always determined in the long run by the quantity

of labour needed to obtain the thing evaluated: it is not what it has actually cost,

but what it would cost in the future with, perhaps, perfected means; and this

quantity, although difficult to evaluate, is always faithfully established by

competition.... It is on this basis that the demand of the seller as well as the supply

of the buyer is reckoned. The former will perhaps declare that the thing has cost

him 10 days‟ labour; but if the latter realises that it can henceforth be produced

with eight days‟ labour, in the event of competition proving this to the two

contracting parties, the value will be reduced, and the market price fixed at eight

days only. Of course, each of the parties believes that the thing is useful, that it is

desired, that without desire there would be no sale; but the fixing of the price has

nothing to do with utility.” (Etudes, etc., Vol. II, p. 267)

It is important to emphasise the point that what determines value is not the time taken to produce

a thing, but the minimum time it could possibly be produced in, and the minimum is ascertained

by competition. Suppose for a moment that there is no more competition and consequently no

longer any means to ascertain the minimum of labour necessary for the production of a

commodity; what will happen? It will suffice to spend six hours‟ work on the production of an

object, in order to have the right, according to M. Proudhon, to demand in exchange six times as

much as the one who has taken only one hour to produce the same object.

Instead of a “proportional relation,” we have a disproportional relation, at any rate if we insist on

sticking to relations, good or bad.

The continual depreciation of labour is only one side, one consequence of the evaluation of

commodities by labour time. The excessive raising of prices, overproduction and many other

features of industrial anarchy have their explanation in this mode of evaluation.

But does labour time used as a measure of value give rise at least to the proportional variety of

products that so delights M. Proudhon?

On the contrary, monopoly in all its monotony follows in its wake and invades the world of

products, just as to everybody‟s knowledge monopoly invades the world of the instruments of

production. It is only in a few branches of industry, like the cotton industry, that very rapid


progress can be made. The natural consequence of this progress is that the products of cotton

manufacture, for instance, fall rapidly in price: but as the price of cotton goes down, the price of

flax will be replaced by cotton. In this way, flax has been driven out of almost the whole of North

America. And we have obtained, instead of the proportional variety of products, the dominance of

cotton.

What is left of this “proportional relation”? Nothing but the pious wish of an honest man who

would like commodities to be produced in proportions which would permit of their being sold at

an honest price. In all ages good-natured bourgeois and philanthropic economists have taken

pleasure in expressing this innocent wish.

Let us hear what old Boisguillebert says:

“The price of commodities,” he says, “must always be proportionate; for it is such

mutual understanding alone that can enable them to exist together so as to give

themselves to one another at any moment (here is M. Proudhon‟s continual

exchangeability) and reciprocally give birth to one another. ... “As wealth, then, is

nothing but this continual intercourse between man and man, craft and craft, etc.,

it is a frightful blindness to go looking for the cause of misery elsewhere than in

the cessation of such traffic brought about by a disturbance of proportion in

prices.” (Dissertation sur la nature des richesses, Daire‟s ed. [pp. 405 and 408])

[Boisguillebert‟s work is quoted from the symposium Economistes-financiers du

XVIII siecle. Prefaced by a historical sketch on each author and accompanied by

commentaries and explanatory notes by Eugene Daire, Paris, 1843.]

Let us listen also to a modern economist:

“The great law as necessary to be affixed to production, that is, the law of

proportion, which alone can preserve the continuity of value.... The equivalent

must be guaranteed.... All nations have attempted, at various periods of their

history, by instituting numerous commercial regulations and restrictions, to effect,

in some degree, the object here explained.... But the natural and inherent

selfishness of man... has urged him to break down all such regulations.

Proportionate production is the realisation of the entire truth of the Science of

Social Economy.” (W. Atkinson, Principles of Political Economy, London 1840,

pp. 170-95)

Fuit Troja. [Troy is no more.] This true proportion between supply and demand, which is

beginning once more to be the object of so many wishes, ceased long ago to exist. It has passed

into the stage of senility. It was possible only at a time when the means of production were

limited, when the movement of exchange took place within very restricted bounds. With the birth

of large-scale industry this true proportion had to come to an end, and production is inevitably

compelled to pass in continuous succession through vicissitudes of prosperity, depression, crisis,

stagnation, renewed prosperity, and so on.

Those who, like Sismondi, wish to return to the true proportion of production, while preserving

the present basis of society, are reactionary, since, to be consistent, they must also wish to bring

back all the other conditions of industry of former times.

What kept production in true, or more or less true, proportions? It was demand that dominated

supply, that preceded it. Production followed close on the heels of consumption. Large-scale

industry, forced by the very instruments at its disposal to produce on an ever-increasing scale, can

no longer wait for demand. Production precedes consumption, supply compels demand.

In existing society, in industry based on individual exchange, anarchy of production, which is the

source of so much misery, is at the same time the source of all progress.

Thus, one or the other:


Either you want the true proportions of past centuries with present-day means of production, in

which case you are both reactionary and utopian.

Or you want progress without anarchy: in which case, in order to preserve the productive forces,

you must abandon individual exchange.

Individual exchange is suited only to the small-scale industry of past centuries with its corollary

of “true proportion,” or else to large-scale industry with all its train of misery and anarchy.

After all, the determination of value by labour time – the formula M. Proudhon gives us as the

regenerating formula of the future – is therefore merely the scientific expression of the economic

relations of present-day society, as was clearly and precisely demonstrated by Ricardo long

before M. Proudhon.

But does the “equalitarian” application of this formula at least belong to M. Proudhon? Was he

the first to think of reforming society by transforming all men into actual workers exchanging

equal amounts of labour? Is it really for him to reproach the Communists – these people devoid of

all knowledge of political economy, these “obstinately foolish men,” these “paradise dreamers” –

with not having found, before him, this “solution of the problem of the proletariat”?

Anyone who is in any way familiar with the trend of political economy in England cannot fail to

know that almost all the Socialists in that country have, at different periods, proposed the

equalitarian application of the Ricardian theory. We quote for M. Proudhon: Hodgskin, Political

Economy, 1827; William Thompson, An Inquiry into the Principles of the Distribution of Wealth

Most Conducive to Human Happiness, 1824; T. R. Edmonds, Practical Moral and Political

Economy, 1828 [18], etc., etc., and four pages more of etc. We shall content ourselves with

listening to an English Communist, Mr. Bray. We shall give the decisive passages in his

remarkable work, Labour‟s Wrongs and Labour‟s Remedy, Leeds, 1839, and we shall dwell some

time upon it, firstly, because Mr. Bray is still little known in France, and secondly, because we

think that we have discovered in him the key to the past, present and future works of M.

Proudhon.

“The only way to arrive at truth is to go at once to First Principles.... Let us... go at

once to the source from whence governments themselves have arisen.... By thus

going to the origin of the thing, we shall find that every form of government, and

every social and governmental wrong, owes its rise to the existing social system –

to the institution of property as it at present exists – and that, therefore, if we

would end our wrongs and our miseries at once and for ever, the present

arrangements of society must be totally subverted.... By thus fighting them upon

their own ground, and with their own weapons, we shall avoid that senseless

clatter respecting „visionaries‟ and „theorists‟, with which they are so ready to

assail all who dare move one step from that beaten track which „by authority‟, has

been pronounced to be the right one. Before the conclusions arrived at by such a

course of proceeding can be overthrown, the economists must unsay or disprove

those established truths and principles on which their own arguments are

founded.” (Bray, pp. 17 and 41) “It is labour alone which bestows value.... Every

man has an undoubted right to all that his honest labour can procure him. When he

thus appropriates the fruits of his labour, he commits no injustice upon any other

human being; for he interferes with no other man‟s right of doing the same with

the produce of his labour.... All these ideas of superior and inferior – of master

and man – may be traced to the neglect of First Principles, and to the consequent

rise of inequality of possessions; and such ideas will never be subverted, so long

as this inequality is maintained. Men have hitherto blindly hoped to remedy the

present unnatural state of things... by destroying existing inequality; but it will be

shortly seen... that misgovernment is not a cause, but a consequence – that it is not


the creator, but the created – that is the offspring of inequality of possessions; and

that the inequality of possessions is inseparably connected with our present social

system.” (Bray, pp. 33, 36 and 37)

“Not only are the greatest advantages, but strict justice also, on the side of a

system of equality.... Every man is a link, in the chain of effects – the beginning of

which is but an idea, and the end, perhaps, the production of a piece of cloth.

Thus, although we may entertain different feelings towards the several parties, it

does not follow that one should be better paid for his labour than another. The

inventor will ever receive, in addition to his just pecuniary reward, that which

genius only can obtain from us – the tribune of our admiration....

“From the very nature of labour and exchange, strict justice not only requires that

all exchangers should be mutually, but that they should likewise be equally,

benefited. Men have only two things which they can exchange with each other,

namely, labour, and the produce of labour.... If a just system of exchanges were

acted upon, the value of articles would be determined by the entire cost of

production; and equal values should always exchange for equal values. If, for

instance, it takes a hatter one day to make a hat, and a shoemaker the same time to

make a pair of shoes – supposing the material used by each to be of the same

value – and they exchange these articles with each other, they are not only

mutually but equally benefited: the advantage derived by either party cannot be a

disadvantage to the other, as each has given the same amount of labour, and the

materials made use of by each were of equal value. But if the hatter should obtain

two pair of shoes for one hat – time and value of material being as before – the

exchange would clearly be an unjust one. The hatter would defraud the shoemaker

of one day‟s labour; and were the former to act thus in all his exchanges, he would

receive, for the labour of half a year, the product of some other person‟s whole

year. We have heretofore acted upon no other than this most unjust system of

exchanges – the workmen have given the capitalist the labour of a whole year, in

exchange for the value of only half a year – and from this, and not from the

assumed inequality of bodily and mental powers in individuals, has arisen the

inequality of wealth and power which at present exists around us. It is an

inevitable condition of inequality of exchanges – of buying at one price and

selling at another – that capitalists shall continue to be capitalists, and working

men to be working men – the one a class of tyrants and the other a class of slaves

– to eternity....

“The whole transaction, therefore, plainly shews that the capitalists and

proprietors do no more than give the working man, for his labour of one week, a

part of the wealth which they obtained from him the week before! – which

amounts to giving him nothing for something.... The whole transaction, therefore,

between the producer and the capitalist is a palpable deception, a mere farce: it is,

in fact, in thousands of instances, no other than a barefaced though legalized

robbery.” (Bray, pp. 45, 48, 49 and 50)

.”.. the gain of the employer will never cease to be the loss of the employed – until

the exchanges between the parties are equal; and exchanges never can be equal

while society is divided into capitalists and producers – the last living upon their

labour and the first bloating upon the profit of that labour.

“It is plain that, establish whatever form of government we will... we may talk of

morality and brotherly love... no reciprocity can exist where there are unequal

exchanges. Inequality of exchanges, as being the cause of inequality of

possessions, is the secret enemy that devours us.” (Bray, pp. 51 and 52)


“It has been deduced, also, from a consideration of the intention and end of

society, not only that all men should labour, and thereby become exchangers, but

that equal values should always exchange for equal values – and that, as the gain

of one man ought never to be the loss of another, value should be determined by

cost of production. But we have seen, that, under the present arrangements of

society... the gain of the capitalist and the rich man is always the loss of the

workman – that this result will invariably take place, and the poor man be left

entirely at the mercy of the rich man, under any and every form of government, so

long as there is inequality of exchanges – and that equality of exchanges can be

ensured only under social arrangements in which labour is universal.... If

exchanges were equal, would the wealth of the present capitalists gradually go

from them to the working classes.” (Bray, pp. 53-55)

“So long as this system of unequal exchanges is tolerated, the producers will be

almost as poor and as ignorant and as hardworked as they are at present, even if

every governmental burthen be swept away and all taxes be abolished... nothing

but a total change of this system – an equality of labour and exchanges – can alter

this state of rights.... The producers have but to make an effort – and by them must

every effort for their own redemption be made – and their chains will be snapped

asunder forever.... As an end, the political equality is there a failure, as a means,

also, it is there a failure.

“Where equal exchanges are maintained, the gain of one man cannot be the loss of

another; for every exchange is then simply a transfer, and not a sacrifice of labour

and wealth. Thus, although under a social system based on equal exchanges, a

parsimonious man may become rich, his wealth will be no more than the

accumulated produce of his own labour. He may exchange his wealth, or he may

give it to others... but a rich man cannot continue wealthy for any length of time

after he has ceased to labour. Under equality of exchanges, wealth cannot have, as

it now has, a procreative and apparently self-generating power, such as

replenishes all waste from consumption; for, unless it be renewed by labour,

wealth, when once consumed, is given up for ever. That which is now called profit

and interest cannot exist as such in connection with equality of exchanges; for

producer and distributor would be alike remunerated, and the sum total of their

labour would determine the value of the article created and brought to the hands

of the consumer.

“The principle of equal exchanges, therefore, must from its very nature ensure

universal labour.” (Bray, pp. 67, 88, 89, 94, 109 and 10)

After having refuted the objections of the economists to communism, Mr. Bray goes on to say:

“If, then a changed character be essential to the success of the social system of

community in its most perfect form – and if, likewise, the present system affords

no circumstances and no facilities for effecting the requisite change of character

and preparing man for the higher and better state desired – it is evident that these

things must necessarily remain as they are.... or else some preparatory step must

be discovered and made use of – some movement partaking partly of the present

and partly of the desired system – some intermediate resting place, to which

society may go with all its faults and its follies, and from which it may move

forward, imbued with those qualities and attributes without which the system of

community and equality cannot as such have existence.” (Bray, p. 134)

“The whole movement would require only co-operation in its simplest form....

Cost of production would in every instance determine value; and equal values


would always exchange for equal values. If one person worked a whole week, and

another worked only half a week, the first would receive double the remuneration

of the last; but this extra pay of the one would not be at the expense of the other,

nor would the loss incurred by the last man fall in any way upon the first. Each

person would exchange the wages he individually received for commodities of the

same value as his respective wages; and in no case could the gain of one man or

one trade be a loss to another man or another trade. The labour of every individual

would alone determine his gains of his losses....

.”..By means of general and local boards of trade... the quantities of the various

commodities required for consumption – the relative value of each in regard to

each other – the number of hands required in various trades and descriptions of

labour – and all other matters connected with production and distribution, could in

a short time be as easily determined for a nation as for an individual company

under the present arrangements.... As individuals compose families, and families

towns, under the existing system, so likewise would they after the joint-stock

change had been effected. The present distribution of people in towns and

villages, bad as it is, would not be directly interfered with.... Under this joint-stock

system, the same as under that now existing, every individual would be at liberty

to accumulate as much as he pleased, and to enjoy such accumulations when and

where he might think proper.... The great productive section of the community... is

divided into an indefinite number of smaller sections, all working, producing and

exchanging their products on a footing of the most perfect equality.... And the

joint-stock modification (which is nothing but a concession to present-day society

in order to obtain communism), by being so constituted as to admit of individual

property in productions in connection with a common property in productive

powers – making every individual dependent on his own exertions, and at the

same time allowing him an equal participation in every advantage afforded by

nature and art – is fitted to take society as it is, and to prepare the way for other

and better changes.” (Bray, pp. 158, 160, 162, 168 and 194)

We now only need to reply in a few words to Mr. Bray who without us and in spite of us had

managed to supplant M. Proudhon, except that Mr. Bray, far from claiming the last word on

behalf of humanity, proposes merely measures which he thinks good for a period of transition

between existing society and a community regime.

One hour of Peter‟s labour exchanges for one hour of Paul‟s labour. That is Mr. Bray‟s

fundamental axiom.

Let us suppose Peter has 12 hours‟ labour before him, and Paul only six. Peter will consequently

have six hours‟ labour left over. What will he do with these six hours‟ labour?

Either he will do nothing with them – in which case he will have worked six hours for nothing; or

else he will remain idle for another six hours to get even; or else, as a last resource, he will give

these six hours‟ labour, which he has no use for, to Paul into the bargain.

What in the end will Peter have earned more than Paul? Some hours of labour? No! He will have

gained only hours of leisure; he will be forced to play the loafer for six hours. And in order that

this new right to loaf might be not only relished but sought after in the new society, this society

would have to find in idleness its highest bliss, and to look upon labour as a heavy shackle from

which it must break free at all costs. And indeed, to return to our example, if only these hours of

leisure that Peter had gained in excess of Paul were really a gain! Not in the least. Paul, beginning

by working only six hours, attains by steady and regular work a result that Peter secures only by

beginning with an excess of work. Everyone will want to be Paul, there will be a competition to

occupy Paul‟s position, a competition in idleness.


Well, then! What has the exchange of equal quantities of labour brought us? Overproduction,

depreciation, excess of labour followed by unemployment; in short, economic relations such as

we see in present-day society, minus the competition of labour.

No! We are wrong! There is still an expedient which may save this new society of Peters and

Pauls. Peter will consume by himself the product of the six hours‟ labour which he has left. But

since he has no longer to exchange because he has produced, he has no need to produce for

exchange; and the whole hypothesis of a society founded on the exchange and division of labour

will fall to the ground. Equality of exchange will have been saved by the simple fact that

exchange will have ceased to be: Paul and Peter would arrive at the position of Robinson.

Thus, if all the members of society are supposed to be actual workers, the exchange of equal

quantities of hours of labour is possible only on condition that the number of hours to be spent on

material production is agreed on before hand. But such an agreement negates individual

exchange.

We still come to the same result, if we take as our starting point not the distribution of the

products created but the act of production. In large-scale industry, Peter is not free to fix for

himself the time of his labour, for Peter‟s labour is nothing without the co-operation of all the

Peters and all the Pauls who make up the workshop. This explains very well the dogged

resistance which the English factory owners put up to the Ten Hours‟ Bill.1 They knew only too

well that a two-hours‟ reduction of labour granted to women and children would carry with it an

equal reduction of working hours for adult men. It is in the nature of large-scale industry that

working hours should be equal for all. What is today the result of capital and the competition of

workers among themselves will be tomorrow, if you sever the relation between labour and

capital, an actual agreement based upon the relation between the sum of productive forces and the

sum of existing needs.

But such an agreement is a condemnation of individual exchange, and we are back again at our

first conclusion!

In principle, there is no exchange of products – but there is the exchange of the labour which co-

operates in production. The mode of exchange of products depends upon the mode of exchange of

the productive forces. In general, the form of exchange of products corresponds to the form of

production. Change the latter, and the former will change in consequence. Thus in the history of

society we see that the mode of exchanging products is regulated by the mode of producing them.

Individual exchange corresponds also to a definite mode of production which itself corresponds

to class antagonism. There is thus no individual exchange without the antagonism of classes.

But the respectable conscience refuses to see this obvious fact. So long as one is a bourgeois, one

cannot but see in this relation of antagonism a relation of harmony and eternal justice, which

allows no one to gain at the expense of another. For the bourgeois, individual exchange can exist

without any antagonism of classes. For him, these are two quite unconnected things. Individual

exchange, as the bourgeois conceives it, is far from resembling individual exchange as it is

practised.

Mr. Bray turns the illusion of the respectable bourgeois into an ideal he would like to attain. In a

purified individual exchange, freed from all the elements of antagonism he finds in it, he sees an

“equalitarian” relation which he would like society to adopt generally.

Mr. Bray does not see that this equalitarian relation, this corrective ideal that he would like to

apply to the world, is itself nothing but the reflection of the actual world; and that therefore it is

totally impossible to reconstitute society on the basis of what is merely an embellished shadow of

1 The Ten Hours‟ Bill, which applied only to women and children, was passed by the British Parliament on June 8,

1847. Many manufacturers, however, ignored the law in practice. – Ed.

https://www.marxists.org/glossary/terms/t/e.htm#ten-hours-bill


it. In proportion as this shadow takes on substance again, we perceive that this substance, far from

being the transfiguration dreamt of, is the actual body of existing society.*

§ 3. Application of the Law of the Proportionality of Value

A) Money

“Gold and silver were the first commodities to have their value constituted.” (Vol.

I, p. 69)

Thus, gold and silver are the first applications of “value constituted” ... by M. Proudhon. And as

M. Proudhon constitutes the value of products determining it by the comparative amount of

labour embodied in them, the only thing he had to do was to prove that variations in the value of

gold and silver are always explained by variations in the labour time taken to produce them. M.

Proudhon has no intention of doing so. He speaks of gold and silver not as commodities, but as

money.

His only logic, if logic it be, consists in juggling with the capacity of gold and silver to be used as

money for the benefit of all the commodities which have the property of being evaluated by

labour time. Decidedly there is more naiveté than malice in this jugglery.

A useful product, once it has been evaluated by the labour time needed to produce it, is always

acceptable in exchange; witness, cries M. Proudhon, gold and silver, which exist in my desired

conditions of “exchangeability”! Gold and silver, then, are value which has reached a state of

constitution: they are the incorporation of M. Proudhon‟s idea. He could not have been happier in

his choice of an example. Gold and silver, apart from their capacity of being commodities,

evaluated like other commodities, in labour time, have also the capacity of being the universal

agents of exchange, of being money. By now considering gold and silver as an application of

“value constituted” by labour time, nothing is easier than to prove that all commodities whose

value is constituted by labour time will always be exchangeable, will be money.

A very simple question occurs to M. Proudhon. Why have gold and silver the privilege of

typifying “constituted value?”

“The special function which usage has devolved upon the precious metal, that of

serving as a medium for trade, is purely conventional, and any other commodity

could, less conveniently perhaps, but just as reliably, fulfil this function.

Economists recognize this, and cite more than one example. What then is the

reason for this universal preference for metals as money? And what is the

explanation of this specialization of the function of money – which has no analogy

in political economy?... Is it possible to reconstruct the series from which money

seems to have broken away, and hence to trace it back to its true principle?” (Vol.

I, pp. 68-69)

Straight away, by formulating the question in these terms, M. Proudhon has presupposed the

existence of money. The first question he should have asked himself was, why, in exchanges as

they are actually constituted, it has been necessary to individualize exchangeable value, so to

speak, by the creation of a special agent of exchange. Money is not a thing, it is a social relation.

Why is the money relation a production relation like any other economic relation, such as the

division of labour, etc.? If M. Proudhon had properly taken account of this relation, he would not

* Mr. Bray‟s theory, like all theories, has found supporters who have allowed themselves to be deluded by appearances.

Equitable labour-exchange bazaars have been set up in London, Sheffield, Leeds and many other towns in England.

These bazaars have all ended in scandalous failures after having absorbed considerable capital. The taste for them has

gone for ever. You are warned, M. Proudhon! [Note by Marx]

It is known that Proudhon did not take this warning to heart. In 1849 he himself made an attempt with a new

Exchange Bank in Paris. The bank, however, failed before it had got going properly; a court case against Proudhon had

to serve to cover its collapse. [Note by F. Engels to the German edition of 1885]


have seen in money an exception, an element detached from a series unknown or needing

reconstruction.

He would have realized, on the contrary, that this relation is a link, and, as such, closely

connected with a whole chain of other economic relations; that this relation corresponds to a

definite mode of production neither more nor less than does individual exchange. What does he

do? He starts off by detaching money from the actual mode of production as a whole, and then

makes it the first member of an imaginary series, of a series to be reconstructed.

Once the necessity for a specific agency of exchange, that is, for money, has been recognized, all

that remains to be explained is why this particular function has developed upon gold and silver

rather than upon any commodity. This is a secondary question, which is explained not by the

chain of production relations, but by the specific qualities inherent in gold and silver as

substances. If all this has made economists for once “go outside the domains of their own science,

to dabble in physics, mechanics, history and so on,” as M. Proudhon reproaches them with doing,

they have merely done what they were compelled to do. The question was no longer within the

domain of political economy.

“What no economist,” says M. Proudhon, “has either seen or understood is the

economic reason which has determined, in favour of the precious metals, the

favour they enjoy.” (Vol. I, p. 69)

This economic reason which nobody – with good ground indeed – has seen or understood, M.

Proudhon has seen, understood and bequeathed to posterity.

“What nobody else has noticed is that, of all commodities, gold and silver were

the first to have their value attain constitution. In the patriarchal period, gold and

silver were still bartered and exchanged in ingots but even then they showed a

visible tendency to become dominant and received a marked degree of preference.

Little by little the sovereigns took possession of them and affixed their seal to

them: and of this sovereign consecration was born money, that is, the commodity

par excellence, which, notwithstanding all the shocks of commerce, retains a

definite proportional value and makes itself accepted for all payments.... The

distinguishing characteristic of gold and silver is due, I repeat, to the fact that,

thanks to their metallic properties, to the difficulties of their production, and

above all to the intervention of state authority, they early won stability and

authenticity as commodities.”

To say that, of all commodities, gold and silver were the first to have their value constituted, is to

say, after all that has gone before, that gold and silver were the first to attain the status of money.

This is M. Proudhon‟s great revelation, this is the truth that none had discovered before him.

If, by these words, M. Proudhon means that of all commodities, gold and silver are the ones

whose time of production was known the earliest, this would be yet another of the suppositions

with which he is so ready to regale his readers. If we wished to harp on this patriarchal erudition,

we would inform M. Proudhon that it was the time needed to produce objects of prime necessity,

such as iron, etc., which was the first to be known. We shall spare him Adam Smith‟s classic

bow.

But, after all that, how can M. Proudhon go on talking about the constitution of a value, since a

value is never constituted by itself? It is constituted, not by the time needed to produce it by itself,

but in relation to the quota of each and every other product which can be created in the same time.

Thus the constitution of the value of gold and silver presupposes an already completed

constitution of a number of other products.

It is then not the commodity that has attained, in gold and silver, the status of “constituted value,”

it is M. Proudhon‟s “constituted value” that has attained, in gold and silver, the status of money.


Let us now make a closer examination of these “economic reasons” which, according to M.

Proudhon, have bestowed upon gold and silver the advantage of being raised to the status of

money sooner than other products, thanks to their having passed through the constitutive phase of

value.

These economic reasons are: the “visible tendency to become dominant,” the “marked

preferences” even in the “patriarchal period,” and other circumlocutions about the actual fact –

which increase the difficulty, since they multiply the fact by multiplying the incidents which M.

Proudhon brings in to explain the fact. M. Proudhon has not yet exhausted all the so-called

economic reasons. Here is one of sovereign, irresistible force:

“Money is born of sovereign consecration: the sovereigns take possession of gold

and silver and affix their seal to them.” (Vol. I, p. 69)

Thus, the whim of sovereigns is for M. Proudhon the highest reason in political economy.

Truly, one must be destitute of all historical knowledge not to know that it is the sovereigns who

in all ages have been subject to economic conditions, but they have never dictated laws to them.

Legislation, whether political or civil, never does more than proclaim, express in words, the will

of economic relations.

Was it the sovereign who took possession of gold and silver to make them the universal agents of

exchange by affixing his seal to them? Or was it not, rather, these universal agents of exchange

which took possession of the sovereign and forced him to affix his seal to them and thus give

them a political consecration?

The impress which was and is still given to money is not that of its value but of its weight. The

stability and authenticity M. Proudhon speaks of apply only to the standard of the money; and this

standard indicates how much metallic matter there is in a coined piece of money.

“The sole intrinsic value of a silver mark,” says Voltaire, with his habitual good

sense, “is a mark of silver, half a pound weighing eight ounces. The weight and

the standard alone form this intrinsic value.” (Voltaire, Système de Law)

[Marx quotes a chapter from Voltaire‟s Historie de parlement. It is entitled

“France in the Period of the Regency and Law‟s System.”]

But the question: how much is an ounce of gold or silver worth, remains nonetheless. If a

cashmere from the Grand Colbert stores bore the trademark pure wool, this trademark would not

tell you the value of the cashmere. There would still remain the question: how much is wool

worth?

“Philip I, King of France,” says M. Proudhon, “mixes with Charlemagne‟s gold

pound a third of alloy, imagining that, having the monopoly of the manufacture of

money, he could do what is done by every tradesman who has the monopoly of a

product. What was actually this debasement of the currency from which Philip

and his successors have been so much blamed? It was perfectly sound reasoning

from the point of view of commercial practice, but very unsound economic

science, viz., to suppose that, as supply and demand regulate value, it is possible,

either by producing an artificial scarcity or by monopolizing manufacture, to

increase the estimation and consequently the value of things; and that this is true

of gold and silver as of corn, wine, oil or tobacco. But Philip‟s fraud was no

sooner suspected than his money was reduced to its true value, and he himself lost

what he had thought to gain from his subjects. The same thing has happened as a

result of every similar attempt.” (Vol. I, pp. 70-71)

It has been proved times without number that, if a prince takes into his head to debase the

currency, it is he who loses. What he gains once at the first issue he loses every time the falsified

coinage returns to him in the form of taxes, etc. But Philip and his successors were able to protect


themselves more or less against this loss, for, once the debased coinage was put into circulation,

they hastened to order a general re-minting of money on the old footing.

And besides, if Philip I had really reasoned like M. Proudhon, he would not have reasoned well

“from the commercial point of view.” Neither Philip I nor M. Proudhon displays any mercantile

genius in imagining that it is possible to alter the value of gold as well as that of every other

commodity merely because their value is determined by the relation between supply and demand.

If King Philip had decreed that one quarter of corn was in future to be called two quarters of

wheat, he would have been a swindler. He would have deceived all the rentiers, all the people

who were entitled to receive 100 quarters of corn. He would have been the cause of all these

people receiving only 50 quarters of corn; he would have had to pay only 50. But in commerce

100 such quarters would never have been worth more than 50. By changing the name we do not

change the thing. The quantity of corn, whither supplied or demanded, will be neither decreased

nor increased by this mere change of name. Thus, the relation between supply and demand being

just the same in spite of this change of name, the price of corn will undergo no real change. When

we speak of the supply and demand of things, we do not speak of the supply and demand of the

name of things. Philip I was not a maker of gold and silver, as M. Proudhon says; he was a maker

of names for coins. Pass off your French cashmeres as Asiatic cashmeres, and you may deceive a

buyer or two; but once the fraud becomes known, your so-called Asiatic cashmeres will drop to

the price of French cashmeres. When he put a false label on gold and silver, King Philip could

deceive only so long as the fraud was not known. Like any other shopkeeper, he deceived his

customers by a false description of his wares, which could not last for long. He was bound sooner

or later to suffer the rigour of commercial laws. Is this what M. Proudhon wanted to prove? No.

According to him, it is from the sovereign and not from commerce that money gets its value. And

what has he really proved? That commerce is more sovereign than the sovereign. Let the

sovereign decree that one mark shall in future be two marks, commerce will keep on saying that

these two marks are worth no more than one mark was formerly.

But, for all that, the question of value determined by the quantity of labour has not been advanced

a step. It still remains to be decided whether the value of these two marks (which have become

what one mark was once) is determined by the cost of production or by the law of supply and

demand.

M. Proudhon continues:

“It should even be borne in mind that if, instead of debasing the currency, it had

been in the king‟s power to double its bulk, the exchange value of gold and silver

would immediately have dropped by half, always from reasons of proportion and

equilibrium.” (Vol. I, p. 71)

If this opinion, which M. Proudhon shares with the other economists, is valid, it argues in favour

of the latter‟s doctrine of supply and demand, and in no way in favour of M. Proudhon‟s

proportionality. For, whatever the quantity of labour embodied in the doubled bulk of gold and

silver, its value would have dropped by half, the demand having remained the same and the

supply having doubled. Or can it be, by any chance, that the “law of proportionality” would have

become confused this time with the so much disdained law of supply and demand? This true

proportion of M. Proudhon‟s is indeed so elastic, is capable of so many variations, combinations

and permutations, that it might well coincide for once with the relation between supply and

demand.

To make “every commodity acceptable in exchange, if not in practice then at least by right,” on

the basis of the role of gold and silver is, then, to misunderstand this role. Gold and silver are

acceptable by law only because they are acceptable in practice; and they are acceptable in

practice because the present organization of production needs a universal medium of exchange.

Law is only the official recognition of fact.


We have seen that the example of money as an application of value which has attained

constitution was chosen by M. Proudhon only to smuggle through his whole doctrine of

exchangeability, that is to say, to prove that every commodity assessed by its cost of production

must attain the status of money. All this would be very fine, were it not for the awkward fact that

precisely gold and silver, as money, are of all commodities the only ones not determined by their

cost of production; and this is so true that in circulation they can be replaced by paper. So long as

there is a certain proportion observed between the requirements of circulation and the amount of

money issued, be it paper, gold, platinum, or copper money, there can be no question of a

proportion to be observed between the intrinsic value (cost of production) and the nominal value

of money. Doubtless, in international trade, money is determined, like any other commodity, by

labour time. But it is also true that gold and silver in international trade are means of exchange as

products and not as money. In other words, they lose this characteristic of “stability and

authenticity,” of “sovereign consecration,” which, for M. Proudhon, forms their specific

characteristic. Ricardo understood the truth so well that, after basing his whole system on value

determined by labour time, and after saying: “Gold and silver, like all other commodities, are

valuable only in proportion to the quantity of labour necessary to produce them, and bring them

to market,”

He adds, nevertheless, that the value of money is not determined by the labour time its substance

embodies, but by the law of supply and demand only.

“Though it [paper money] has no intrinsic value, yet, by limiting its quantity, its

value in exchange is as great as an equal denomination of coin, or of bullion in

that coin. On the same principle, too, namely, by limitation of its quantity, a

debased coin would circulate at the value it should bear, if it were of the legal

weight and fineness, and not at the value of the quantity of metal which it actually

contained. In the history of the British coinage, we find, accordingly, that the

currency was never depreciated in the same proportion that it was debased; the

reason of which was, that it never was increased in quantity, in proportion to its

diminished intrinsic value.” (Ricardo, loc. cit., pp. 206-07)

This is what J. B. Say observes on this passage of Ricardo‟s:

“This example should suffice, I think, to convince the author that the basis of all

value is not the amount of labour needed to make a commodity, but the need felt

for that commodity, balanced by its scarcity.” [The reference is to Say‟s note on

the French edition of Ricardo‟s book, Vol. II, pp. 206-07.]

Thus money, which for Ricardo is no longer a value determined by labour time, and which J. B.

Say therefore takes as an example to convince Ricardo that the other values could not be

determined by labour time either, this money, I say, taken by J. B. Say as an example of a value

determined exclusively by supply and demand, becomes for M. Proudhon the example par

excellence of the application of value constituted... by labour time.

To conclude, if money is not a value “constituted” by labour time, it is all the less likely that it

could have anything in common with M. Proudhon‟s true “proportion.” Gold and silver are

always exchangeable, because they have the special function of serving as the universal agent of

exchange, and in no wise because they exist in a quantity proportional to the sum total of wealth;

or, to put it still better, they are always proportional because, alone of all commodities, they serve

as money, the universal agent of exchange, whatever their quantity in relation to the sum total of

wealth.

“A circulation can never be so abundant as to overflow; for by diminishing its

value, in the same proportion you will increase its quantity, and by increasing its

value, diminish its quantity.” (Ricardo, Vol. II, p. 205)

“What an imbroglio this political economy is!” cries M. Proudhon. (Vol. I, p. 72)


“Cursed gold!” cries a Communist flippantly [through the mouth of M.

Proudhon]. You might as well say: “Cursed wheat, cursed vines, cursed sheep! –

for just like gold and silver, every commercial value must attain its strictly exact

determination.” (Vol. I, p. 73)

The idea of making sheep and vines attain the status of money is not new. In France, it belongs to

the age of Louis XIV. At that period, money having begun to establish its omnipotence, the

depreciation of all other commodities was being complained of, and the time when “every

commercial value” might attain its strictly exact determination, the status of money, was being

eagerly invoked. Even in the writings of Boisguillebert, one of the oldest of French economists,

we find:

“Money, then, by the arrival of innumerable competitors in the form of

commodities themselves, re-established in their true values, will be thrust back

again within its natural limits.” (Économistes financiers du dix-huitième siècle,

Daire edition, p. 422)

One sees that the first illusions of the bourgeoisie are also their last.

B) Surplus Labour

“In works on political economy we read this absurd hypothesis: If the price of

everything were doubled.... As if the price of everything were not the proportion

of things – and one could double a proportion, a relation, a law!” (Proudhon, Vol.

I, p. 81)

Economists have fallen into this error through not knowing how to apply the “law of

proportionality” and of “constituted value.”

Unfortunately in the very same work by M. Proudhon, Volume I, p. 110, we read the absurd

hypothesis that, “if wages rose generally, the price of everything else would rise.” Furthermore, if

we find the phrase in question in works on political economy, we also find as explanation of it.

“When one speaks of the price of all commodities going up or down, one always

excludes some one commodity going up or down. The excluded commodity is, in

general, money or labour.” (Encyclopedia Metropolitana or Universal Dictionary

of Knowledge, Vol. IV, Article “Political Economy,” by N. W. Senior, London,

1836. Regarding the phrase under discussion, see also J. St. Mill: Essays on Some

Unsettled Questions of Political Economy, London, 1844, and Tooke: A History

of Prices, etc., London, 1838.) [Full reference is Th. Tooke, A History of Prices,

and of the State of the Circulation, from 1793 to 1837, Vols. I-II, London, 1838]

Let us pass now to the second application of “constituted value,” and of other proportions –

whose only defect is their lack of proportion. And let us see whether M. Proudhon is happier here

than in the monetarization of sheep.

“An axiom generally admitted by economists is that all labour must leave a

surplus. In my opinion this proposition is universally and absolutely true: it is the

corollary of the law of proportion, which may be regarded as the summary of the

whole of economic science. But, if the economists will permit me to say so, the

principle that all labour must leave a surplus is meaningless according to their

theory, and is not susceptible of any demonstration.” (Proudhon, Vol. I, p. 73)

To prove that all labour must leave a surplus, M. Proudhon personifies society; he turns it into a

person, Society – a society which is not by any means a society of persons, since it has its law

apart, which have nothing in common with the persons of which society is composed, and its

“own intelligence,” which is not the intelligence of common men, but an intelligence devoid of

common sense. M. Proudhon reproaches the economists with not having understood the


personality of this collective being. We have pleasure in confronting him with the following

passage from an American economist, who accuses the economists of just the opposite:

“The moral entity – the grammatical being called a nation, has been clothed in

attributes that have no real existence except in the imagination of those who

metamorphose a word into a thing.... This has given rise to many difficulties and

to some deplorable misunderstanding in political economy.” (Th. Cooper,

Lectures on the Elements of Political Economy, Colombia,1826) [The first edition

of the book was published in Colombia in 1826. A second, enlarged edition

appeared in London in 1831.]

“This principle of surplus labour,” continues M. Proudhon, “is true of individuals

only because it emanates from society, which thus confers on them the benefit of

its own laws.” (Vol. I, p. 75)

Does M. Proudhon mean thereby merely that the production of the social individual exceeds that

of the isolated individual? Is M. Proudhon referring to this excess of the production of associated

individuals over that of non-associated individuals? If so, we could quote for him a hundred

economists who have expressed this simple truth without any of the mysticism with which M.

Proudhon surrounds himself. This, for example, is what Mr. Sadler says:

“Combined labour produces results which individual exertion could never

accomplish. As mankind, therefore, multiply in number, the products of their

united industry would greatly exceed the amount of any mere arithmetical

addition calculated on such an increase.... In the mechanical arts, as well as in

pursuits of science, a man may achieve more in a day... than a solitary... individual

could perform in his whole life.... Geometry says... that the whole is only equal to

the sum of all its parts; as applied to the subject before us, this axiom would be

false. Regarding labour, the great pillar of human existence, it may be said that the

entire product of combined exertion almost infinitely exceeds all which individual

and disconnected efforts could possibly accomplish.” (T. Sadler, The Law of

Population, Vol. I, pp. 83 and 84, London, 1830)

To return to M. Proudhon. Surplus labour, he says, is explained by the person, Society. The life of

this person is guided by laws, the opposite of those which govern the activities of man as an

individual. He desires to prove this by “facts.”

“The discovery of an economic process can never provide the inventor with a

profit equal to that which he procures for society.... It has been remarked that

railway enterprises are much less a source of wealth for the contractors than for

the state.... The average cost of transporting commodities by road is 18 centimes

per ton per kilometre, from the collection of the goods to their delivery. It has

been calculated that at this rate an ordinary railway enterprise would not obtain 10

per cent net profit, a result approximately equal to that of a road-transport

enterprise. But let us suppose that the speed of rail transport compared with that of

road transport is as 4 is to 1. Since in society time is value itself, the railway

would, prices being equal, present an advantage of 400 per cent over road-

transport. Yet this enormous advantage, very real for society, is far from being

realized in the same proportion for the carrier, who, while bestowing upon society

an extra value of 400 per cent, does not for his own part draw 10 per cent. To

bring the matter home still more pointedly, let us suppose, in fact, that the railway

puts up its rate to 25 centimes, the cost of road transport remaining at 18: it would

instantly lose all its consignments. Senders, receivers, everybody would return to

the van, to the primitive waggon if necessary. The locomotive would be

abandoned. A social advantage of 400 per cent would be sacrificed to a private


loss of 35 per cent. The reason for this is easily grasped: the advantage resulting

from the speed of the railway is entirely social, and each individual participates in

it only in a minute proportion (it must be remembered that at the moment we are

dealing only with the transport of goods), while the loss strikes the consumer

directly and personally. A social profit equal to 400 represents for the individual,

if society is composed only of a million men, four ten-thousandths; while a loss of

33 per cent for the consumer would suppose a social deficit of 33 million.”

(Proudhon Vol. I, p. 75-76)

Now, we may even overlook the fact that M. Proudhon expresses a quadrupled speed as 400 per

cent of the original speed; but that he should bring into relation the percentage of speed and the

percentage of profit and establish a proportion between two relations which, although measured

separately by percentages, are nevertheless incommensurate with each other, is to establish a

proportion between the percentages without reference to denominations.

Percentages are always percentages, 10 per cent and 400 per cent are commensurable; they are to

each other as 10 is to 400. Therefore, concludes M. Proudhon, a profit of 10 per cent is worth 40

times less than a quadrupled speed. To save appearances, he says that, for society, time is money.

This error arises from his recollecting vaguely that there is a connexion between labour value and

labour time, and he hastens to identify labour time with transport time; that is, he identifies the

few firemen, drivers and others, whose labour time is actually transport time, with the whole of

society. Thus at one blow, speed has become capital, and in this case he is fully right in saying:

“A profit of 400 per cent will be sacrificed to a loss of 35 per cent.” After establishing this strange

proposition as a mathematician, he gives us the explanation of it as an economist.

“A social profit equal to 400 represents for the individual, in a society of only a million men, four

ten-thousandths.” Agreed; but we are dealing not with 400, but with 400 per cent, and a profit of

400 per cent represents for the individual 400 per cent, neither more nor less. Whatever be the

capital, the dividends will always be in the ratio of 400 per cent. What does M. Proudhon do? He

takes percentages for capital, and, as if he were afraid of his confusion not being manifest

enough, “pointed” enough, he continues:

“A loss of 33 per cent for the consumer would suppose a social deficit of 33 million.” A loss of

33 per cent for the consumer remains a loss of 33 per cent for a million consumers. How then can

M. Proudhon say pertinently that the social deficit in the case of a 33 per cent loss amounts to 33

million, when he knows neither the social capital nor even the capital of a single one of the

persons concerned? Thus it was not enough for M. Proudhon to have confused capital with

percentage; he surpasses himself by identifying the capital sunk in an enterprise with the number

of interested parties.

“To bring the matter home still more pointedly let us suppose in fact” a given capital. A social

profit of 400 per cent divided among a million participants, each of them interested to the extent

of one franc, would give 4 francs profit per head – and not 0.0004, as M. Proudhon alleges.

Likewise a loss of 33 per cent for each of the participants represents a social deficit of 330,000

francs and not of 33 million (100:33 = 1,000,000:330,000).

M. Proudhon, preoccupied with his theory of the person, Society, forgets to divide by 100, which

entails a loss of 330,000 francs; but 4 francs profit per head make 4 million francs profit for

society. There remains for society a net profit of 3,670,000 francs. This accurate calculation

proves precisely the contrary of what M. Proudhon wanted to prove: namely, that the profits and

losses of society are not in inverse ratio to the profits and losses of individuals.

Having rectified these simple errors of pure calculation, let us take a look at the consequences

which we would arrive at, if we admitted this relation between speed and capital in the case of

railways, as M. Proudhon gives it – minus the mistakes in calculation. Let us suppose that a

transport four times as rapid costs four times as much; this transport would not yield less profit


than cartage, which is four times slower and costs a quarter the amount. Thus, if cartage takes 18

centimes, rail transport could take 72 centimes. This would be, according to “the rigor of

mathematics,” the consequence of M. Proudhon‟s suppositions – always minus his mistakes in

calculation. But here he is all of a sudden telling us that if, instead of 72 centimes, rail transport

takes only 25, it would instantly lose all its consignments. Decidedly we should have to go back

to the van, to the primitive waggon even. Only, if we have any advice to give M. Proudhon, it is

not to forget, in his Programme of the Progressive Association, to divide by 100. But, alas! it is

scarcely to be hoped that our advice will be listened to, for M. Proudhon is so delighted with his

“progressive association,” that he cries most emphatically:

“I have already shown in Chapter II, by the solution of the antinomy of value, that

the advantage of every useful discovery is incomparably less for the inventor,

whatever he may do, than for society. I have carried the demonstration in regard

to this point in the rigor of mathematics!”

Let us return to the fiction of the person, Society, a fiction which has no other aim than that of

proving this simple truth – that a new invention which enables a given amount of labour to

produce a greater number of commodities, lowers the marketable value of the product. Society,

then, makes a profit, not by obtaining more exchange values, but by obtaining more commodities

for the same value. As for the inventor, competition makes his profit fall successively to the

general level of profits. Has M. Proudhon proved this proposition as he wanted to? No. This does

not prevent him from reproaching the economists with failure to prove it. To prove to him on the

contrary that they have proved it, we shall cite only Ricardo and Lauderdale – Ricardo, the head

of the school which determines value by labour time, and Lauderdale, one of the most

uncompromising defenders of the determination of value by supply and demand. Both have

expounded the same proposition:

“By constantly increasing the facility of production, we constantly diminish the

value of some of the commodities before produced, though by the same means we

not only add to the national riches, but also to the power of future production....

As soon as by the aid of machinery, or by the knowledge of natural philosophy,

you oblige natural agents to do the work which was before done by man, the

exchangeable value of such work falls accordingly. If 10 men turned a corn mill,

and it be discovered that by the assistance of wind, or of water, the labour of these

10 men may be spared, the flour which is the produce partly of the work

performed by the mill, would immediately fall in value, in proportion to the

quantity of labour saved; and the society would be richer by the commodities

which the labour of the 10 men could produce, the funds destined for their

maintenance being in no degree impaired.” (Ricardo Vol. II, p. 59)

Lauderdale, in his turn, says:

“In every instance where capital is so employed as to produce a profit, it

uniformly arises, either – from its supplanting a portion of labour, which would

otherwise be performed by the hand of man; or – from its performing a portion of

labour, which is beyond the reach of the personal exertion of man to accomplish.

The small profit which the proprietors of machinery generally acquire, when

compared with the wages of labour, which the machine supplants, may perhaps

create a suspicion of the rectitude of this opinion. Some fire-engines, for instance,

draw more water from a coalpit in one day than could be conveyed on the

shoulder of 300 men, even assisted by the machinery of buckets; and a fire-engine

undoubtedly performs its labour at a much smaller expense than the amount of the

wages of those whose labour it thus supplants. This is, in truth, the case with all

machinery. All machines must execute the labour that was antecedently performed

at a cheaper rate than it could be done by the hand of man.... If such a privilege is


given for the invention of a machine, which performs, by the labour of one man, a

quantity of work that used to take the labour of four; as the possession of the

exclusive privilege prevents any competition in doing the work, but what proceeds

from the labour of the workmen, their wages, as long as the patent continues, must

obviously form the measure of the patentee‟s charge; that is to secure

employment, he has only to charge a little less than the wages of the labour which

the machine supplants. But when the patent expires, other machines of the same

nature are brought into competition; and then his charge must be regulated on the

same principle as every other, according to the abundance of machines.... The

profit of capital employed..., though it arises from supplanting labour, comes to be

regulated, not by the value of the labour it supplants but, as in all other cases, by

the competition among the proprietors of capital that presents itself for performing

the duty, and the demand for it.” (Pp. 119, 123, 124, 125, 134)

Finally, then, so long as the profit is greater than in other industries, capital will be thrown into

the new industry until the rate of profit falls to the general level.

We have just seen that the example of the railway was scarcely suited to throw any light on his

fiction of the person, Society. Nevertheless, M. Proudhon boldly resumes his discourse:

“With these points cleared up, nothing is easier than to explain how labour must

leave a surplus for each producer.” (Vol. I, p. 77)

What now follows belongs to classical antiquity. It is a poetical narrative intended to refresh the

reader after the fatigue which the rigor of the preceding mathematical demonstrations must have

caused him. M. Proudhon gives the person, Society, the name of Prometheus, whose high deeds

he glorifies in these terms:

“First of all, Prometheus emerging from the bosom of nature awakens to life, in a

delightful inertia, etc., etc. Prometheus sets to work, and on this first day, the first

day of the second creation, Prometheus‟ product, that is, his wealth, his well-

being, is equal to 10. On the second day, Prometheus divides his labour, and his

product becomes equal to 100. On the third day and on each of the following days,

Prometheus invents machines, discovers new utilities in bodies, new forces in

nature.... With every step of his industrial activity, there is an increase in the

number of his products, which marks an enhancement of happiness for him. And

since, after all, to consume is for him to produce, it is clear that every day‟s

consumption, using up only the product of the day before, leaves a surplus product

for the next day.” (Vol. I, pp. 77-78)

This Prometheus of M. Proudhon‟s is a queer character, as weak in logic as in political economy.

So long as Prometheus merely teaches us the division of labour, the application of machinery, the

exploitation of natural forces and scientific power, multiplying the productive forces of men and

giving a surplus compared with the produce of labour in isolation, this new Prometheus has the

misfortune only of coming too late. But the moment Prometheus starts talking about production

and consumption he becomes really ludicrous. To consume, for him, is to produce; he consumes

the next day what he produced the day before, so that he is always one day in advance; this day in

advance is his “surplus labour.” But, if he consumes the next day what he has produced the day

before, he must, on the first day, which had no day before, have done two days‟ work in order to

be one day in advance later on. How did Prometheus earn this surplus on the first day, when there

was neither division of labour, nor machinery, nor even any knowledge of physical forces other

than fire? Thus the question, for all its being carried back “to the first day of the second creation,”

has not advanced a single step forward. This way of explaining things savours both of Greek and

of Hebrew, it is at once mystical and allegorical. It gives M. Proudhon a perfect right to say:


“I have proved by theory and by facts the principle that all labour must have a

surplus.”

The “facts” are the famous progressive calculation; the theory is the myth of Prometheus.

“But,” continues M. Proudhon, “this principle, while being as certain as an

arithmetical proposition, is as yet far from being realized by everyone. Whereas,

with the progress of collective industry, every day‟s individual labour produces a

greater and greater product, and whereas therefore, by a necessary consequence,

the worker with the same wage ought to become richer every day, there actually

exist estates in society which profit and others which decay.” (Vol. I, pp. 79-80)

In 1770 the population of the United Kingdom of Great Britain was 15 million, and the

productive population was 3 million. The scientific power of production equalled a population of

about 12 million individuals more. Therefore there were, altogether, 15 million of productive

forces. Thus the productive power was to the population as 1 is to 1; and the scientific power was

to the manual power as 4 is to 1.

In 1840 the population did not exceed 30 million: the productive population was 6 million. But

the scientific power amounted to 650 million; that is, it was to the whole population as 21 is to 1,

and to manual power as 108 is to 1.

In English society the working day thus acquired in 70 years a surplus of 2,700 per cent

productivity; that is, in 1840 it produced 27 times as much as in 1770. According to M. Proudhon,

the following question should be raised: why was not the English worker of 1840 27 times as rich

as the one of 1770? In raising such a question one would naturally be supposing that the English

could have produced this wealth without the historical conditions in which it was produced, such

as: private accumulation of capital, modern division of labour, automatic workshops, anarchical

competition, the wage system – in short, everything that is based upon class antagonism. Now,

these were precisely the necessary conditions of existence for the development of productive

forces and of surplus labour. Therefore, to obtain this development of productive forces and this

surplus labour, there had to be classes which profited and classes which decayed.

What then, ultimately, is this Prometheus resuscitated by M. Proudhon? It is society, social

relations based on class antagonism. These relations are not relations between individual and

individual, but between worker and capitalist, between farmer and landlord, etc. Wipe out these

relations and you annihilate all society, and your Prometheus is nothing but a ghost without arms

or legs; that is, without automatic workshops, without division of labour – in a word, without

everything that you gave him to start with in order to make him obtain this surplus labour.

If then, in theory, it sufficed to interpret, as M. Proudhon does, the formula of surplus labour in

the equalitarian sense, without taking into account the actual conditions of production, it should

suffice, in practice, to share out equally among the workers all the wealth at present acquired,

without changing in any way the present conditions of production. Such a distribution would

certainly not assure a high degree of comfort to the individual participants.

But M. Proudhon is not so pessimistic as one might think. As proportion is everything for him, he

has to see in his fully equipped Prometheus, that is, in present-day society, the beginnings of a

realization of his favourite idea.

“But everywhere, too, the progress of wealth, that is, the proportion of values, is

the dominant law; and when economists hold up against the complaints of the

social party the progressive growth of the public wealth, and the improved

conditions of even the most unfortunate classes, they unwittingly proclaim a truth

which is the condemnation of their theories.” (Vol. I, p. 80)

What is, exactly, collective wealth, public fortune? It is the wealth of the bourgeoisie – not that of

each bourgeois in particular. Well, the economists have done nothing but show how, in the


existing relations of production, the wealth of the bourgeoisie has grown and must grow still

further. As for the working classes, it still remains a very debatable question whether their

condition has improved as a result of the increase in so-called public wealth. If economists, in

support of their optimism, cite the example of the English workers employed in the cotton

industry, they see the condition of the latter only in the rare moments of trade prosperity. These

moments of prosperity are to the periods of crisis and stagnation in the “true proportion” of 3 to

10. But perhaps also, in speaking of improvement, the economists were thinking of the millions

of workers who had to perish in the East Indies so as to procure for the million and a half workers

employed in England in the same industry three years‟ prosperity out of ten.

As for the temporary participation in the increase of public wealth, that is a different matter. The

fact of temporary participation is explained by the theory of the economists. It is the confirmation

of this theory and not its “condemnation,” as M. Proudhon calls it. If there were anything to be

condemned, it would surely be the system of M. Proudhon, who would reduce the worker, as we

have shown, to the minimum wage, in spite of the increase of wealth. It is only by reducing the

worker to the minimum wage that he would be able to apply the true proportion of values, of

“value constituted” by labour time. It is because wages, as a result of competition, oscillate now

above, now below, the price of food necessary for the sustenance of the worker, that he can

participate to a certain extent in the development of collective wealth, and can also perish from

want. This is the whole theory of the economists who have no illusions on the subject.

After his lengthy digressions on railways, on Prometheus, and on the new society to be

reconstituted on “constituted value,” M. Proudhon collects himself; emotion overpowers him and

he cries in fatherly tones:

“I beseech the economists to ask themselves for one moment, in the silence of

their hearts – far from the prejudices that trouble them and regardless of the

employment they are engaged in or hope to obtain, of the interests they subserve,

or the approbation to which they aspire, of the honours which nurse their vanity –

let them say whether before this day the principle that all labour must leave a

surplus appeared to them with this chain of premises and consequences that we

have revealed.” (Vol. I, p. 80)

Chapter Two:

The Metaphysics of Political Economy

§ 1. The Method

Here we are, right in Germany! We shall now have to talk metaphysics while talking political

economy. And in this again we shall but follow M. Proudhon‟s “contradictions.” Just now he

forced us to speak English, to become pretty well English ourselves. Now the scene is changing.

M. Proudhon is transporting us to our dear fatherland and is forcing us, whether we like it or not,

to become German again.

If the Englishman transforms men into hats, the German transforms hats into ideas. The

Englishman is Ricardo, rich banker and distinguished economist; the German is Hegel, simple

professor at the University of Berlin.

Louis XV, the last absolute monarch and representative of the decadence of French royalty, had

attached to his person a physician who was himself France‟s first economist. This doctor, this

economist, represented the imminent and certain triumph of the French bourgeoisie. Doctor

Quesnay made a science out of political economy; he summarized it in his famous Tableau

économique. Besides the thousand and one commentaries on this table which have appeared, we

possess one by the doctor himself. It is the Analysis of the Economic Table followed by “seven

important observations.”

M. Proudhon is another Dr. Quesnay. He is the Quesnay of the metaphysics of political economy.

Now metaphysics – indeed all philosophy – can be summed up, according to Hegel, in method.

We must, therefore, try to elucidate the method of M. Proudhon, which is at least as foggy as the

Economic Table. It is for this reason that we are making seven more or less important

observations. If Dr. Proudhon is not pleased with our observations, well, then, he will have to

become an Abbe Baydeau and give the “explanation of the economico-metaphysical method”

himself.

First Observation

“We are not giving a history according to the order in time, but according to the

sequence of ideas. Economic phases or categories are in their manifestation

sometimes contemporary, sometimes inverted.... Economic theories have

nonetheless their logical sequence and their serial relation in the understanding: it

is this order that we flatter ourselves to have discovered.” (Proudhon, Vol. I, p.

146)

M. Proudhon most certainly wanted to frighten the French by flinging quasi-Hegelian phrases at

them. So we have to deal with two men: firstly with M. Proudhon, and then with Hegel. How

does M. Proudhon distinguish himself from other economists? And what part does Hegel play in

M. Proudhon‟s political economy?

Economists express the relations of bourgeois production, the division of labour, credit, money,

etc., as fixed, immutable, eternal categories. M. Proudhon, who has these ready-made categories

before him, wants to explain to us the act of formation, the genesis of these categories, principles,

laws, ideas, thoughts.

Economists explain how production takes place in the above-mentioned relations, but what they

do not explain is how these relations themselves are produced, that is, the historical movement

which gave them birth. M. Proudhon, taking these relations for principles, categories, abstract

thoughts, has merely to put into order these thoughts, which are to be found alphabetically

47 Poverty of Philosophy. Chapter Two

arranged at the end of every treatise on political economy. The economists‟ material is the active,

energetic life of man; M. Proudhon‟s material is the dogmas of the economists. But the moment

we cease to pursue the historical movement of production relations, of which the categories are

but the theoretical expression, the moment we want to see in these categories no more than ideas,

spontaneous thoughts, independent of real relations, we are forced to attribute the origin of these

thoughts to the movement of pure reason. How does pure, eternal, impersonal reason give rise to

these thoughts? How does it proceed in order to produce them?

If we had M. Proudhon‟s intrepidity in the matter of Hegelianism we should say: it is

distinguished in itself from itself. What does this mean? Impersonal reason, having outside itself

neither a base on which it can pose itself, nor an object to which it can oppose itself, nor a subject

with which it can compose itself, is forced to turn head over heels, in posing itself, opposing itself

and composing itself – position, opposition, composition. Or, to speak Greek – we have thesis,

antithesis, and synthesis. For those who do not know the Hegelian formula: affirmation, negation

and negation of the negation. That is what language means. It is certainly not Hebrew (with due

apologies M. Proudhon); but it is the language of this pure reason, separate from the individual.

Instead of the ordinary individual with his ordinary manner of speaking and thinking we have

nothing but this ordinary manner in itself – without the individual.

Is it surprising that everything, in the final abstraction – for we have here an abstraction, and not

an analysis – presents itself as a logical category? Is it surprising that, if you let drop little by little

all that constitutes the individuality of a house, leaving out first of all the materials of which it is

composed, then the form that distinguishes it, you end up with nothing but a body; that, if you

leave out of account the limits of this body; you soon have nothing but a space – that if, finally,

you leave out of the account the dimensions of this space, there is absolutely nothing left but pure

quantity, the logical category? If we abstract thus from every subject all the alleged accidents,

animate or inanimate, men or things, we are right in saying that in the final abstraction, the only

substance left is the logical category. Thus the metaphysicians who, in making these abstractions,

think they are making analyses, and who, the more they detach themselves from things, imagine

themselves to be getting all the nearer to the point of penetrating to their core – these

metaphysicians in turn are right in saying that things here below are embroideries of which the

logical categories constitute the canvas. This is what distinguishes the philosopher from the

Christian. The Christian, in spite of logic, has only one incarnation of the Logos; the philosopher

has never finished with incarnations. If all that exists, all that lives on land, and under water, can

be reduced by abstraction to a logical category – if the whole real world can be drowned thus in a

world of abstractions, in the world of logical categories – who need be astonished at it?

All that exists, all that lives on land and under water, exists and lives only by some kind of

movement. Thus, the movement of history produces social relations; industrial movement gives

us industrial products, etc.

Just as by means of abstraction we have transformed everything into a logical category, so one

has only to make an abstraction of every characteristic distinctive of different movements to

attain movement in its abstract condition – purely formal movement, the purely logical formula of

movement. If one finds in logical categories the substance of all things, one imagines one has

found in the logical formula of movement the absolute method, which not only explains all

things, but also implies the movement of things.

It is of this absolute method that Hegel speaks in these terms:

“Method is the absolute, unique, supreme, infinite force, which no object can

resist; it is the tendency of reason to find itself again, to recognize itself in every

object.” (Logic, Vol. III, p. 29)

All things being reduced to a logical category, and every movement, every act of production, to

method, it follows naturally that every aggregate of products and production, of objects and of


movement, can be reduced to applied metaphysics. What Hegel has done for religion, law, etc.,

M. Proudhon seeks to do for political economy.

So what is this absolute method? The abstraction of movement. What is the abstraction of

movement? Movement in abstract condition. What is movement in abstract condition? The purely

logical formula of movement or the movement of pure reason. Wherein does the movement of

pure reason consist? In posing itself, opposing itself, composing itself; in formulating itself as

thesis, antithesis, synthesis; or, yet, in affirming itself, negating itself, and negating its negation.

How does reason manage to affirm itself, to pose itself in a definite category? That is the business

of reason itself and of its apologists.

But once it has managed to pose itself as a thesis, this thesis, this thought, opposed to itself, splits

up into two contradictory thoughts – the positive and the negative, the yes and no. The struggle

between these two antagonistic elements comprised in the antithesis constitutes the dialectical

movement. The yes becoming no, the no becoming yes, the yes becoming both yes and no, the no

becoming both no and yes, the contraries balance, neutralize, paralyse each other. The fusion of

these two contradictory thoughts constitutes a new thought, which is the synthesis of them. This

thought splits up once again into two contradictory thoughts, which in turn fuse into a new

synthesis. Of this travail is born a group of thoughts. This group of thoughts follows the same

dialectic movement as the simple category, and has a contradictory group as antithesis. Of these

two groups of thoughts is born a new group of thoughts, which is the antithesis of them.

Just as from the dialectic movement of the simple categories is born the group, so from the

dialectic movement of the groups is born the series, and from the dialectic movement of the series

is born the entire system.

Apply this method to the categories of political economy and you have the logic and metaphysics

of political economy, or, in other words, you have the economic categories that everybody knows,

translated into a little-known language which makes them look as if they had never blossomed

forth in an intellect of pure reason; so much do these categories seem to engender one another, to

be linked up and intertwined with one another by the very working of the dialectic movement.

The reader must not get alarmed at these metaphysics with all their scaffolding of categories,

groups, series, and systems. M. Proudhon, in spite of all the trouble he has taken to scale the

heights of the system of contradictions, has never been able to raise himself above the first two

rungs of simple thesis and antithesis; and even these he has mounted only twice, and on one of

these two occasions he fell over backwards.

Up to now we have expounded only the dialectics of Hegel. We shall see later how M. Proudhon

has succeeded in reducing it to the meanest proportions. Thus, for Hegel, all that has happened

and is still happening is only just what is happening in his own mind. Thus the philosophy of

history is nothing but the history of philosophy, of his own philosophy. There is no longer a

“history according to the order in time,” there is only “the sequence of ideas in the

understanding.” He thinks he is constructing the world by the movement of thought, whereas he

is merely reconstructing systematically and classifying by the absolute method of thoughts which

are in the minds of all.

Second Observation

Economic categories are only the theoretical expressions, the abstractions of the social relations

of production, M. Proudhon, holding this upside down like a true philosopher, sees in actual

relations nothing but the incarnation of the principles, of these categories, which were slumbering

– so M. Proudhon the philosopher tells us – in the bosom of the “impersonal reason of humanity.”

M. Proudhon the economist understands very well that men make cloth, linen, or silk materials in

definite relations of production. But what he has not understood is that these definite social

relations are just as much produced by men as linen, flax, etc. Social relations are closely bound


up with productive forces. In acquiring new productive forces men change their mode of

production; and in changing their mode of production, in changing the way of earning their

living, they change all their social relations. The hand-mill gives you society with the feudal lord;

the steam-mill, society with the industrial capitalist.

The same men who establish their social relations in conformity with the material productivity,

produce also principles, ideas, and categories, in conformity with their social relations.

Thus the ideas, these categories, are as little eternal as the relations they express. They are

historical and transitory products.

There is a continual movement of growth in productive forces, of destruction in social relations,

of formation in ideas; the only immutable thing is the abstraction of movement – mors

immortalis.

[Marx quotes these words from the following passage of Lucretius‟s poem On The Nature of

Things (Book III, line 869): “mortalem vitam mors cum immortalis ademit” (“when mortal life

has been taken away by immortal death”).]

Third Observation

The production relations of every society form a whole. M. Proudhon considers economic

relations as so many social phases, engendering one another, resulting one from the other like the

antithesis from the thesis, and realizing in their logical sequence the impersonal reason of

humanity.

The only drawback to this method is that when he comes to examine a single one of these phases,

M. Proudhon cannot explain it without having recourse to all the other relations of society; which

relations, however, he has not yet made his dialectic movement engender. When, after that, M.

Proudhon, by means of pure reason, proceeds to give birth to these other phases, he treats them as

if they were new-born babes. He forgets that they are of the same age as the first.

Thus, to arrive at the constitution of value, which for him is the basis of all economic evolutions,

he could not do without division of labour, competition, etc. Yet in the series, in the

understanding of M. Proudhon, in the logical sequence, these relations did not yet exist.

In constructing the edifice of an ideological system by means of the categories of political

economy, the limbs of the social system are dislocated. The different limbs of society are

converted into so many separate societies, following one upon the other. How, indeed, could the

single logical formula of movement, of sequence, of time, explain the structure of society, in

which all relations coexist simultaneously and support one another?

Fourth Observation

Let us see now to what modifications M. Proudhon subjects Hegel‟s dialectics when he applies it

to political economy.

For him, M. Proudhon, every economic category has two sides – one good, the other bad. He

looks upon these categories as the petty bourgeois looks upon the great men of history: Napoleon

was a great man; he did a lot of good; he also did a lot of harm.

The good side and the bad side, the advantages and drawbacks, taken together form for M.

Proudhon the contradiction in every economic category.

The problem to be solved: to keep the good side, while eliminating the bad.

Slavery is an economic category like any other. Thus it also has its two sides. Let us leave alone

the bad side and talk about the good side of slavery. Needless to say, we are dealing only with

direct slavery, with Negro slavery in Surinam, in Brazil, in the Southern States of North America.

Direct slavery is just as much the pivot of bourgeois industry as machinery, credits, etc. Without

slavery you have no cotton; without cotton you have no modern industry. It is slavery that gave


the colonies their value; it is the colonies that created world trade, and it is world trade that is the

precondition of large-scale industry. Thus slavery is an economic category of the greatest

importance.

Without slavery North America, the most progressive of countries, would be transformed into a

patriarchal country. Wipe North America off the map of the world, and you will have anarchy –

the complete decay of modern commerce and civilization. Cause slavery to disappear and you

will have wiped America off the map of nations.*

Thus slavery, because it is an economic category, has always existed among the institutions of the

peoples. Modern nations have been able only to disguise slavery in their own countries, but they

have imposed it without disguise upon the New World.

What would M. Proudhon do to save slavery? He would formulate the problem thus: preserve the

good side of this economic category, eliminate the bad.

Hegel has no problems to formulate. He has only dialectics. M. Proudhon has nothing of Hegel‟s

dialectics but the language. For him the dialectic movement is the dogmatic distinction between

good and bad.

Let us for a moment consider M. Proudhon himself as a category. Let us examine his good and

bad side, his advantages and his drawbacks.

If he has the advantage over Hegel of setting problems which he reserves the right of solving for

the greater good of humanity, he has the drawback of being stricken with sterility when it is a

question of engendering a new category by dialectical birth-throes. What constitutes dialectical

movement is the coexistence of two contradictory sides, their conflict and their fusion into a new

category. The very setting of the problem of eliminating the bad side cuts short the dialectic

movement. It is not the category which is posed and opposed to itself, by its contradictory nature,

it is M. Proudhon who gets excited, perplexed and frets and fumes between the two sides of the

category.

Caught thus in a blind alley, from which it is difficult to escape by legal means, M. Proudhon

takes a real flying leap which transports him at one bound into a new category. Then it is that, to

his astonished gaze, is revealed the serial relation in the understanding.

He takes the first category that comes handy and attributes to it arbitrarily the quality of supplying

a remedy for the drawbacks of the category to be purified. Thus, if we are to believe M.

Proudhon, taxes remedy the drawbacks of monopoly; the balance of trade, the drawbacks of

taxes; landed property, the drawbacks of credit.

By taking the economic categories thus successively, one by one, and making one the antidote to

the other, M. Proudhon manages to make with this mixture of contradictions and antidotes to

contradictions, two volumes of contradictions, which he rightly entitles: Le Système des

contradictions économiques. [The System of Economic Contradictions]

Fifth Observation

“In the absolute reason all these ideas... are equally simple, and general.... In fact,

we attain knowledge only by a sort of scaffolding of our ideas. But truth in itself is

* This was perfectly correct for the year 1847. At that time the world trade of the United States was limited mainly to

import of immigrants and industrial products, and export of cotton and tobacco, i.e., of the products of southern slave

labour. The Northern States produced mainly corn and meat for the slave states. It was only when the North produced

corn and meat for export and also became an industrial country, and when the American cotton monopoly had to face

powerful competition, in India, Egypt, Brazil, etc., that the abolition of slavery became possible. And even then this led

to the ruin of the South, which did not succeed in replacing the open Negro slavery by the disguised slavery of Indian

and Chinese coolies. [Note by Engels to the 1885 German edition]


independent of these dialectical symbols and freed from the combinations of our

minds.” (Proudhon, Vol. II, p. 97)

Here all of a sudden, by a kind of switch-over of which we now know the secret, the metaphysics

of political economy has become an illusion! Never has M. Proudhon spoken more truly. Indeed,

from the moment the process of the dialectic movement is reduced to the simple process of

opposing good to bad, and of administering one category as an antidote to another, the categories

are deprived of all spontaneity; the idea “ceases to function”; there is no life left in it. It is no

longer posed or decomposed into categories. The sequence of categories has become a sort of

scaffolding. Dialectics has ceased to be the movement of absolute reason. There is no longer any

dialectics but only, at the most, absolutely pure morality.

When M. Proudhon spoke of the serial relation in understanding, of the logical sequence of

categories, he declared positively that he did not want to give history according to the order in

time, that is, in M. Proudhon‟s view, the historical sequence in which the categories have

manifested themselves. Thus for him everything happened in the pure ether of reason. Everything

was to be derived from this ether by means of dialectics. Now that he has to put this dialectics

into practice, his reason is in default. M. Proudhon‟s dialectics runs counter to Hegel‟s dialectics,

and now we have M. Proudhon reduced to saying that the order in which he gives the economic

categories is no longer the order in which they engender one another. Economic evolutions are no

longer the evolutions of reason itself.

What then does M. Proudhon give us? Real history, which is, according to M. Proudhon‟s

understanding, the sequence in which the categories have manifested themselves in order of time?

No! History as it takes place in the idea itself? Still less! That is, neither the profane history of

categories, nor their sacred history! What history does he give us then? The history of his own

contradictions. Let us see how they go, and how they drag M. Proudhon in their train.

Before entering upon this examination, which gives rise to the sixth important observation, we

have yet another, less important observation to make.

Let us admit with M. Proudhon that real history, history according to the order in time, is the

historical sequence in which ideas, categories and principles have manifested themselves.

Each principle has had its own century in which to manifest itself. The principle of authority, for

example, had the 11th century, just as the principle of individualism had the 18th century. In

logical sequence, it was the century that belonged to the principle, and not the principle which

belonged to the century. When, consequently, in order to save principles as much as to save

history, we ask ourselves why a particular principle was manifested in the 11th century or in the

18th century rather than in any other, we are necessarily forced to examine minutely what men

were like in the 11th century, what they were like in the 18th, what were their respective needs,

their productive forces, their mode of production, the raw materials of their production – in short,

what were the relations between man and man which resulted from all these conditions of

existence. To get to the bottom of all these questions – what is this but to draw up the real,

profane history of men in every century and to present these men as both the authors and the

actors of their own drama? But the moment you present men as the actors and authors of their

own history, you arrive – by detour – at the real starting point, because you have abandoned those

eternal principles of which you spoke at the outset.

M. Proudhon has not even gone far enough along the crossroad which an ideologist takes to reach

the main road of history.

Sixth Observation

Let us take the sideroad with M. Proudhon.

We shall concede that economic relations, viewed as immutable laws, eternal principles, ideal

categories, existed before active and energetic men did; we shall concede further that these laws,


principles and categories had, since the beginning of time, slumbered “in the impersonal reason of

humanity.” We have already seen that, with all these changeless and motionless eternities, there is

no history left; there is at most history in the idea, that is, history reflected in the dialectic

movement of pure reason. M. Proudhon, by saying that, in the dialectic movement ideas are no

longer “differentiated,” has done away with both the shadow of movement and the movement of

shadows, by means of which one could still have created at least a semblance of history. Instead

of that, he imputes to history his own impotence. He lays the blame on everything, even the

French language.

“It is not correct then,” says M. Proudhon, the philosopher, “to say that something

appears, that something is produced: in civilization as in the universe, everything

has existed, has acted, from eternity. This applies to the whole of social

economy.” (Vol. II, p. 102)

So great is the productive force of the contradictions which function and which made M.

Proudhon function, that, in trying to explain history, he is forced to deny it; in trying to explain

the successive appearance of social relations, he denies that anything can appear: in trying to

explain production, with all its phases, he questions whether anything can be produced!

Thus, for M. Proudhon, there is no longer any history: no longer any sequence of ideas. And yet

his book still exists; and it is precisely that book which is, to use his own expression, “history

according to the sequence of ideas.” How shall we find a formula, for M. Proudhon is a man of

formulas, to help him to clear all these contradictions in one leap?

To this end he has invented a new reason, which is neither the pure and virgin absolute reason,

nor the common reason of men living and acting in different periods, but a reason quite apart –

the reason of the person, Society – of the subject, Humanity – which under the pen of M.

Proudhon figures at times also as “social genius,” “general reason,” or finally as “human reason.”

This reason, decked out under so many names, betrays itself nevertheless, at every moment, as

the individual reason of M. Proudhon, with its good and its bad side, its antidotes and its

problems.

“Human reason does not create truth,” hidden in the depths of absolute, eternal reason. It can only

unveil it. But such truths as it has unveiled up to now are incomplete, insufficient, and

consequently contradictory. Hence, economic categories, being themselves truths discovered,

revealed by human reason, by social genius, are equally incomplete and contain within

themselves the germ of contradictions. Before M. Proudhon, social genius saw only the

antagonistic elements, and not the synthetic formula, both hidden simultaneously in absolute

reason. Economic relations, which merely realize on earth these insufficient truths, these

incomplete ideas, are consequently contradictory in themselves, and present two sides, one good,

the other bad.

To find complete truth, the idea, in all its fullness, the synthetic formula that is to annihilate the

contradiction, this is the problem of social genius. This again is why, in M. Proudhon‟s illusion,

this same social genius has been harried from one category to another without ever having been

able, despite all its battery of categories, to snatch from God or from absolute reason, a synthetic

formula.

“At first, society” (social genius) “states a primary fact, puts forward a

hypothesis... a veritable antinomy, whose antagonistic results develop in the social

economy in the same way as its consequences could have been deduced in the

mind; so that industrial movement, following in all things the deduction of ideas,

splits up into two currents, one of useful effects, the other of subversive results.

To bring harmony into the constitution of this two-side principle, and to solve this

antinomy, society gives rise to a second, which will soon be followed by a third;

and progress of social genius will take place in this manner, until, having


exhausted all its contradictions – I suppose, but it is not proved that there is a limit

to human contradictions – it returns in one leap to all its former positions and with

a single formula solves all its problems.” (Vol. I, p. 133)

Just as the antithesis was before turned into an antidote, so now the thesis becomes a hypothesis.

This change of terms, coming from M. Proudhon, has no longer anything surprising for us!

Human reason, which is anything but pure, having only incomplete vision, encounters at every

step new problems to be solved. Every new thesis which it discovers in absolute reason and

which is the negation of the first thesis, becomes for it a synthesis, which it accepts rather naively

as the solution of the problem in question. It is thus that this reason frets and fumes in ever

renewing contradictions until, coming to the end of the contradictions, it perceives that all its

theses and syntheses are merely contradictory hypotheses. In its perplexity, “human reason, social

genius, returns in one leap to all its former positions, and in a single formula, solves all its

problems.” This unique formula, by the way, constitutes M. Proudhon‟s true discovery. It is

constituted value.

Hypotheses are made only in view of a certain aim. The aim that social genius, speaking through

the mouth of M. Proudhon, set itself in the first place, was to eliminate the bad in every economic

category, in order to have nothing left but the good. For it, the good, the supreme well-being, the

real practical aim, is equality. And why did the social genius aim at equality rather than

inequality, fraternity, Catholicism, or any other principle? Because “humanity has successively

realized so many separate hypotheses only in view of a superior hypothesis,” which precisely is

equality. In other words: because equality is M. Proudhon‟s ideal. He imagines that the division

of labour, credit, the workshop – all economic relations – were invented merely for the benefit of

equality, and yet they always ended up by turning against it. Since history and the fiction of M.

Proudhon contradict each other at every step, the latter concludes that there is a contradiction. If

there is a contradiction, it exists only between his fixed idea and real movement.

Henceforth, the good side of an economic relation is that which affirms equality; the bad side,

that which negates it and affirms inequality. Every new category is a hypothesis of the social

genius to eliminate the inequality engendered by the preceding hypothesis. In short, equality is

the primordial intention, the mystical tendency, the providential aim that the social genius has

constantly before its eyes as it whirls in the circle of economic contradictions. Thus, Providence

is the locomotive which makes the whole of M. Proudhon‟s economic baggage move better than

his pure and volatized reason. He has devoted to Providence a whole chapter, which follows the

one on taxes.

Providence, providential aim, this is the great word used today to explain the movement of

history. In fact, this word explains nothing. It is at most a rhetorical form, one of the various ways

of paraphrasing facts.

It is a fact that in Scotland landed property acquired a new value by the development of English

industry. This industry opened up new outlets for wool. In order to produce wool on a large scale,

arable land had to be transformed into pasturage. To effect this transformation, the estates had to

be concentrated. To concentrate the estates, small holdings had first to be abolished, thousands of

tenants had to be driven from their native soil and a few shepherds in charge of millions of sheep

to be installed in their place. Thus, by successive transformations, landed property in Scotland has

resulted in the driving out of men by sheep. Now say that the providential aim of the institution of

landed property in Scotland was to have men driven out by sheep, and you will have made

providential history.

Of course, the tendency towards equality belongs to our century. To say now that all former

centuries, with entirely different needs, means of production, etc., worked providentially for the

realization of equality is, firstly, to substitute the means and the men of our century for the men

and the means of earlier centuries and to misunderstand the historical movement by which the


successive generations transformed the results acquired by the generations that preceded them.

Economists know very well that the very thing that was for the one a finished product was for the

other but the raw material for new production.

Suppose, as M. Proudhon does, that social genius produced, or rather improvised, the feudal lords

with the providential aim of transforming the settlers into responsible and equally-placed

workers: and you will have effected a substitution of aims and of persons worthy of the

Providence that instituted landed property in Scotland, in order to give itself the malicious

pleasure of driving out men by sheep.

But since M. Proudhon takes such a tender interest in Providence, we refer him to the Histoire de

l’economie politique of M. de Villeneuve-Bargemont, who likewise goes in pursuit of a

providential aim. This aim, however, is not equality, but Catholicism.

Seventh and Last Observation

Economists have a singular method of procedure. There are only two kinds of institutions for

them, artificial and natural. The institutions of feudalism are artificial institutions, those of the

bourgeoisie are natural institutions. In this, they resemble the theologians, who likewise establish

two kinds of religion. Every religion which is not theirs is an invention of men, while their own is

an emanation from God. When the economists say that present-day relations – the relations of

bourgeois production – are natural, they imply that these are the relations in which wealth is

created and productive forces developed in conformity with the laws of nature. These relations

therefore are themselves natural laws independent of the influence of time. They are eternal laws

which must always govern society. Thus, there has been history, but there is no longer any. There

has been history, since there were the institutions of feudalism, and in these institutions of

feudalism we find quite different relations of production from those of bourgeois society, which

the economists try to pass off as natural and as such, eternal.

Feudalism also had its proletariat – serfdom, which continued all the germs of the bourgeoisie.

Feudal production also had two antagonistic elements which are likewise designated by the name

of the good side and the bad side of feudalism, irrespective of the fact that it is always the bad

side that in the end triumphs over the good side. It is the bad side that produces the movement

which makes history, by providing a struggle. If, during the epoch of the domination of

feudalism, the economists, enthusiastic over the knightly virtues, the beautiful harmony between

rights and duties, the patriarchal life of the towns, the prosperous condition of domestic industry

in the countryside, the development of industry organized into corporations, guilds and

fraternities, in short, everything that constitutes the good side of feudalism, had set themselves the

problem of eliminating everything that cast a shadow on the picture – serfdom, privileges,

anarchy – what would have happened? All the elements which called forth the struggle would

have been destroyed, and the development of the bourgeoisie nipped in the bud. One would have

set oneself the absurd problem of eliminating history.

After the triumph of the bourgeoisie, there was no longer any question of the good or the bad side

of feudalism. The bourgeoisie took possession of the productive forces it had developed under

feudalism. All the old economic forms, the corresponding civil relations, the political state which

was the official expression of the old civil society, were smashed.

Thus, feudal production, to be judged properly, must be considered as a mode of production

founded on antagonism. It must be shown how wealth was produced within this antagonism, how

the productive forces were developed at the same time as class antagonisms, how one of the

classes, the bad side, the drawback of society, went on growing until the material conditions for

its emancipation had attained full maturity. Is not this as good as saying that the mode of

production, the relations in which productive forces are developed, are anything but eternal laws,

but that they correspond to a definite development of men and of their productive forces, and that

a change in men‟s productive forces necessarily brings about a change in their relations of


production? As the main thing is not to be deprived of the fruits of civilization, of the acquired

productive forces, the traditional forms in which they were produced must be smashed. From this

moment, the revolutionary class becomes conservative.

The bourgeoisie begins with a proletariat which is itself a relic of the proletariat [In the copy

presented by Marx to N. Utina, the words “working class” are written here. - Ed.] of feudal times.

In the course of its historical development, the bourgeoisie necessarily develops its antagonistic

character, which at first is more or less disguised, existing only in a latent state. As the

bourgeoisie develops, there develops in its bosom a new proletariat, a modern proletariat; there

develops a struggle between the proletarian class and the bourgeoisie class, a struggle which,

before being felt, perceived, appreciated, understood, avowed, and proclaimed aloud by both

sides, expresses itself, to start with, merely in partial and momentary conflicts, in subversive acts.

On the other hand, if all the members of the modern bourgeoisie have the same interests

inasmuch as they form a class as against another class, they have opposite, antagonistic interests

inasmuch as they stand face-to-face with one another. This opposition of interests results from the

economic conditions of their bourgeois life. From day to day it thus becomes clearer that the

production relations in which the bourgeoisie moves have not a simple, uniform character, but a

dual character; that in the selfsame relations in which wealth is produced, poverty is also

produced; that in the selfsame relations in which there is a development of the productive forces,

there is also a force producing repression; that these relations produce bourgeois wealth – i.e., the

wealth of the bourgeois class – only by continually annihilating the wealth of the individual

members of this class and by producing an ever-growing proletariat.

The more the antagonistic character comes to light, the more the economists, the scientific

representatives of bourgeois production, find themselves in conflict with their own theory; and

different schools arise.

We have the fatalist economists, who in their theory are as indifferent to what they call the

drawbacks of bourgeois production as the bourgeois themselves are in practice to the sufferings

of the proletarians who help them to acquire wealth. In this fatalist school, there are Classics and

Romantics. The Classics, like Adam Smith and Ricardo, represent a bourgeoisie which, while still

struggling with the relics of feudal society, works only to purge economic relations of feudal

taints, to increase the productive forces and to give a new upsurge to industry and commerce. The

proletariat that takes part in this struggle and is absorbed in this feverish labour experiences only

passing, accidental sufferings, and itself regards them as such. Economists like Adam Smith and

Ricardo, who are the historians of this epoch, have no other mission than that of showing how

wealth is acquired in bourgeois production relations, of formulating these relations into

categories, into laws, and of showing how superior these laws, these categories, are for the

production of wealth to the laws and categories of feudal society. Poverty is in their eyes merely

the pang which accompanies every childbirth, in nature as in industry.

The Romantics belong to our own age, in which the bourgeoisie is in direct opposition to the

proletariat; in which poverty is engendered in as great abundance as wealth. The economists now

pose as blasé fatalists, who, from their elevated position, cast a proudly disdainful glance at the

human machines who manufacture wealth. They copy all the developments given by their

predecessors, and the indifference which in the latter was merely naiveté becomes in them

coquetry.

Next comes the humanitarian school, which sympathizes with the bad side of present-day

production relations. It seeks, by way of easing its conscience, to palliate even if slightly the real

contrasts; it sincerely deplores the distress of the proletariat, the unbridled competition of the

bourgeois among themselves; it counsels the workers to be sober, to work hard and to have few

children; it advises the bourgeois to put a reasoned ardour into production. The whole theory of

this school rests on interminable distinctions between theory and practice, between principles and


results, between ideas and application, between form and content, between essence and reality,

between right and fact, between the good side and the bad side.

The philanthropic school is the humanitarian school carried to perfection. It denies the necessity

of antagonism; it wants to turn all men into bourgeois; it wants to realize theory in so far as it is

distinguished from practice and contains no antagonism. It goes without saying that, in theory, it

is easy to make an abstraction of the contradictions that are met with at every moment in actual

reality. This theory would therefore become idealized reality. The philanthropists, then, want to

retain the categories which express bourgeois relations, without the antagonism which constitutes

them and is inseparable from them. They think they are seriously fighting bourgeois practice, and

they are more bourgeois than the others.

Just as the economists are the scientific representatives of the bourgeois class, so the socialists

and communists are the theoreticians of the proletarian class. So long as the proletariat is not yet

sufficiently developed to constitute itself as a class, and consequently so long as the struggle itself

of the proletariat with the bourgeoisie has not yet assumed a political character, and the

productive forces are not yet sufficiently developed in the bosom of the bourgeoisie itself to

enable us to catch a glimpse of the material conditions necessary for the emancipation of the

proletariat and for the formation of a new society, these theoreticians are merely utopians who, to

meet the wants of the oppressed classes, improvise systems and go in search of a regenerating

science. But in the measure that history moves forward, and with it the struggle of the proletariat

assumes clearer outlines, they no longer need to seek science in their minds; they have only to

take note of what is happening before their eyes and to become its mouthpiece. So long as they

look for science and merely make systems, so long as they are at the beginning of the struggle,

they see in poverty nothing but poverty, without seeing in it the revolutionary, subversive side,

which will overthrow the old society. From this moment, science, which is a product of the

historical movement, has associated itself consciously with it, has ceased to be doctrinaire and has

become revolutionary.

Let us return to M. Proudhon.

Every economic relation has a good and a bad side; it is the one point on which M. Proudhon

does not give himself the lie. He sees the good side expounded by the economists; the bad side he

sees denounced by the socialists. He borrows from the economists the necessity of eternal

relations; he borrows from the socialists the illusion of seeing in poverty nothing but poverty. He

is in agreement with both in wanting to fall back upon the authority of science. Science for him

reduces itself to the slender proportions of a scientific formula; he is the man in search of

formulas. Thus it is that M. Proudhon flatters himself on having given a criticism of both political

economy and communism: he is beneath them both. Beneath the economists, since, as a

philosopher who has at his elbow a magic formula, he thought he could dispense with going into

purely economic details; beneath the socialists, because he has neither courage enough nor insight

enough to rise, be it even speculatively, above the bourgeois horizon.

He wants to be the synthesis – he is a composite error.

He wants to soar as the man of science above the bourgeois and proletarians; he is merely the

petty bourgeois, continually tossed back and forth between capital and labour, political economy

and communism.

§ 2. Division of Labour and Machinery

The division of labour, according to M. Proudhon, opens the series of economic evolutions.

Good side of the division of labour

“Considered in its essence, the division of labour is the

manner in which equality of conditions and intelligence

is realized.” (Tome I, p. 93.)


Bad side of the division of labour

“The division of labour has become for us an instrument

of poverty.” (Tome I, p. 94.)

“Labour, by dividing itself according to the law which is

peculiar to it, and which is the primary condition of its

fruitfulness, ends in the negation of its aims and destroys

itself.” (Tome I, p. 94.)

Problem to be solved

To find the “recomposition which wipes out the

drawbacks of the division, while retaining its useful

effects.”

The division of labour is, according to M. Proudhon, an eternal law, a simple, abstract category.

Therefore the abstraction, the idea, the word must suffice for him to explain the division of labour

at different historical epochs. Castes, corporations, manufacture, large-scale industry, must be

explained by the single word divide. First study carefully the meaning of “divide,” and you will

have no need to study the numerous influences which give the division of labour a definitive

character in every epoch.

Certainly, things would be made much too easy if they were reduced to M. Proudhon‟s

categories. History does not proceed so categorically. It took three whole centuries in Germany to

establish the first big division of labour, the separation of the towns from the country. In

proportion, as this one relation of town and country was modified, the whole of society was

modified. To take only this one aspect of the division of labour, you have the old republics, and

you have Christian feudalism; you have old England with its barons and you have modern

England with its cotton lords. In the 14th and 15th centuries, when there were as yet no colonies,

when America did not yet exist for Europe, when Asia existed only through the intermediary of

Constantinople, when the Mediterranean was the centre of commercial activity, the division of

labour had a very different form, a very different aspect from that of the 17th century, when the

Spanish, the Portuguese, the Dutch, the English, and the French had colonies established in all

parts of the world. The extent of the market, its physiognomy, give to the division of labour at

different periods a physiognomy, a character, which it would be difficult to deduce from the

single word divide, from the idea, from the category.

“All economists since Adam Smith,” says M. Proudhon, “have pointed out the

advantages and drawbacks of the law of division, but insist much more on the first

than on the second, because that was more serviceable for their optimism, and

none of them has ever wondered what could be the drawbacks to a law.... How

does the same principle, pursued vigorously to its consequences, lead to

diametrically opposite results? Not one economist before or since A. Smith has

even perceived that here was a problem to elucidate. Say goes to the length of

recognizing that in the division of labour the same cause that produces the good

engenders the bad.” (Vol. I, p. 95-96)

Adam Smith goes further than M. Proudhon thinks. He saw clearly that

“the difference of natural talents in different men is, in reality, much less than we

are aware of; and the very different genius which appears to distinguish men of

different professions, when grown up to maturity, is not so much the cause as the

effect of the division of labour.” (Vol. I, p. 20)


In principle, a porter differs less from a philosopher than a mastiff from a greyhound. It is the

division of labour which has set a gulf between them. All this does not prevent M. Proudhon from

saying elsewhere that Adam Smith has not the slightest idea of the drawbacks produced by the

division of labour. It is this again that makes him say that J. B. Say was the first to recognize “that

in the division of labour the same cause that produces the good engenders the bad.” (Vol. I, p. 96)

But let us listen to Lemontey; Suum cuique. [To each his own.]

“M. J. B. Say has done me the honour of adopting in his excellent treatise on

political economy the principle that I brought to light in this fragment on the

moral influence of the division of labour. The somewhat frivolous title of my

book* doubtless prevented him from citing me. It is only to this motive that I can

attribute the silence of a writer too rich in his own stock to disavow so modest a

loan.” (Lemontey, Oeuvres completes, Vol. I, p. 245, Paris, 1840)

Let us do him this justice: Lemontey wittily exposed the unpleasant consequences of the division

of labour as it is constituted today, and M. Proudhon found nothing to add to it. But now that,

through the fault of M. Proudhon, we have been drawn into this question of priority, let us say

again, in passing, that long before M. Lemontey, and 17 years before Adam Smith, who was a

pupil of A. Ferguson, the last-named gave a clear exposition of the subject in a chapter which

deals specifically with the division of labour.

“It may even be doubted, whether the measure of national capacity increases with

the advancement of arts. Many mechanical arts... succeed best under a total

suppression of sentiment and reason; and ignorance is the mother of industry as

well as superstition. Reflection and fancy are subject to err; but a habit of moving

the hand, or the foot, is independent of either. Manufactures, accordingly, prosper

most, where the mind is least consulted, and where the workshop may, without

any great effort of imagination, be considered as an engine, the parts of which are

men.... The general officer may be a great proficient in the knowledge of war,

while the skill of the soldier is confined to a few motions of the hand and the foot.

The former may have gained what the latter has lost.... And thinking itself, in this

age of separations, may become a peculiar craft.” (A. Ferguson, An Essay on the

History of Civil Society, Edinburgh, 1783 (Vol. II, pp. 108, 109, 110)

To bring this literary survey to a close, we expressly deny that “all economists have insisted far

more on the advantages than on the drawbacks of the division of labour.” It suffices to mention

Sismondi.

Thus, as far as the advantages of the division of labour are concerned, M. Proudhon had nothing

further to do than to paraphrase the general phrases known to everybody.

Let us now see how he derives from the division of labour, taken as a general law, as a category,

as a thought, the drawbacks which are attached to it. How is it that this category, this law implies

an unequal distribution of labour to the detriment of M. Proudhon‟s equalitarian system?

“At this solemn hour of the division of labour, the storm winds begin to blow over

humanity. Progress does not take place for all in an equal and uniform manner....

It begins by taking possession of a small number of the privileged.... It is this

preference for person on the part of progress that has for so long kept up the belief

* Lemontey alludes to his book: Raison, folie, chacun son mot; petit cours de morale mis à la portée des vieux enfants

(Reason, Folly, to Each His Own Word; a Short Course in Morality Within the Mental Reach of Old Children), Paris,

1801. Marx quotes Lemontey‟s work Influence morale de la division du travail (The Moral Influence

of the Division of Labour), in which Lemontey refers to the above book.


in the natural and providential inequality of conditions, has given rise to castes,

and hierarchically constituted all societies.” (Proudhon, Vol. I, p. 94)

The division of labour created castes. Now, castes are the drawbacks of the division of labour;

thus, it is the division of labour that has engendered the drawbacks. Quod erat demonstrandum.

[Which was the thing to be proved.] Will you go further and ask what made the division of labour

create castes, hierarchical constitutions and privileged persons? M. Proudhon will tell you:

Progress. And what made progress? Limitation. Limitation, for M. Proudhon, is acceptance of

persons on the part of progress.

After philosophy comes history. It is no longer either descriptive history or dialectical history, it

is comparative history. M. Proudhon establishes a parallel between the present-day printing

worker and the printing worker of the Middle Ages; between the man of letters of today and the

man of letters of the Middle Ages, and he weighs down the balance on the side of those who

belong more or less to the division of labour as the Middle Ages constituted or transmitted it. He

opposes the division of labour of one historical epoch. Was that what M. Proudhon had to prove?

No. He should have shown us the drawbacks of the division of labour in general, of the division

of labour as a category. Besides, why stress this part of M. Proudhon‟s work, since a little later

we shall see him formally retract all these alleged developments?

“The first effect of fractional labour,” continues M. Proudhon, “after the

depravation of the soul, is the prolongation of the shifts, which grow in inverse

ratio to the sum total of intelligence expended.... But as the length of the shifts

cannot exceed 16 to 18 hours per day, the moment the compensation cannot be

taken out of the time, it will be taken out of the price, and the wages will

diminish.... What is certain, and the only thing for us to note, is that the universal

conscience does not assess at the same rate the work of a foreman and the labour

of a mechanic‟s assistant. It is therefore necessary to reduce the price of the day‟s

work; so that the worker, after having been afflicted in his soul by a degrading

function, cannot escape being struck in his body by the meagreness of his

remuneration.” (Vol. I, p. 97-98)

We pass over the logical value of these syllogisms, which Kant would call paralogisms which

lead astray.

This is the substance of it:

The division of labour reduces the worker to a degrading function; to this degrading function

corresponds a depraved soul; to the depravation of the soul is befitting an ever-increasing wage

reduction. And to prove that this reduction is befitting to a depraved soul, M. Proudhon says, to

relieve his conscience, that the universal conscience wills it thus. Is M. Proudhon‟s soul to be

reckoned as a part of the universal conscience?

Machinery is, for M. Proudhon, “the logical antithesis of the division of labour,” and with the

help of his dialectics, he begins by transforming machinery into the workshop.

After presupposing the modern workshop, in order to make poverty the outcome of the division

of labour, M. Proudhon presupposes poverty engendered by the division of labour, in order to

come to the workshop and be able to represent it as the dialectical negation of that poverty. After

striking the worker morally by a degrading function, physically by the meagreness of the wage;

after putting the worker under the dependence of the foreman, and debasing his work to the

labour of a mechanic‟s assistant, he lays the blame again on the workshop and the machinery for

degrading the worker “by giving him a master,” and he completes his abasement by making him

“sink from the rank of artisan to that of common labourer.” Excellent dialectics! And if he only

stopped there! But no, he has to have a new history of the division of labour, not any longer to

derive the contradictions from it, but to reconstruct the workshop after his own fashion. To attain

this end he finds himself compelled to forget all he has just said about division.


Labour is organised, is divided differently according to the instruments it disposes over. The

hand-mill presupposes a different division of labour from the steam-mill. Thus, it is slapping

history in the face to want to begin by the division of labour in general, in order to get

subsequently to a specific instrument of production, machinery.

Machinery is no more an economic category than the bullock that drags the plough. Machinery is

merely a productive force. The modern workshop, which depends on the application of

machinery, is a social production relation, an economic category.

Let us see now how things happen in M. Proudhon‟s brilliant imagination.

“In society, the incessant appearance of machinery is the antithesis, the inverse

formula of the division of labour: it is the protest of the industrial genius against

fractional and homicidal labour. What, actually, is a machine? A way of uniting

different portions of labour which had been separated by the division of labour.

Every machine can be defined as a summary of several operations.... Thus,

through the machine there will be a restoration of the worker.... Machinery, which

in political economy places itself in contradiction to the division of labour,

represents synthesis, which in the human mind is opposed to analysis.... Division

merely separated the different parts of labour, letting each one devote himself to

the speciality which most suited him; the workshop groups the workers according

to the relation of each part to the whole.... It introduces the principle of authority

in labour.... But this is not all; the machine or the workshop, after degrading the

worker by giving him a master, completes his abasement by making him sink

from the rank of artisan to that of common labourer.... The period we are going

through at the moment, that of machinery, is distinguished by a special

characteristic, the wage worker. The wage worker is subsequent to the division of

labour and to exchange.” (Vol. I, p. 135, 136, 161)

Just a simple remark to M. Proudhon. The separation of the different parts of labour, leaving to

each one the opportunity of devoting himself to the speciality best suited to him – a separation

which M. Proudhon dates from the beginning of the world – exists only in modern industry under

the rule of competition.

M. Proudhon goes on to give us a most “interesting genealogy,” to show how the workshop arose

from the division of labour and the wage worker from the workshop.

1) He supposes a man who “noticed that by dividing up production into its different parts and

having each one performed by a separate worker,” the forces of production would be multiplied.

2) This man, “grasping the thread of this idea, tells himself that, by forming a permanent group of

workers selected for the special purpose he sets himself, he will obtain a more sustained

production, etc.” (Vol. I, p. 161)

3) This man makes a proposal to other men, to make them grasp his idea and the thread of his

idea.

4) This man, at the beginning of industry, deals on terms of equality with his companions who

later become his workmen.

5) “One realises, in fact, that this original equality had rapidly to disappear in view of the

advantageous position of the master and the dependence of the wage-earner.” (Vol. I, p.163)

That is another example of M. Proudhon‟s historical and descriptive method.

Let us now examine, from the historical and economic point of view, whether the workshop of

the machine really introduced the principle of authority in society subsequently to the division of

labour; whether it rehabilitated the worker on the one hand, while submitting him to authority on

the other; whether the machine is the recomposition of divided labour, the synthesis of labour as

opposed to its analysis.


Society as a whole has this in common with the interior of a workshop, that it too has its division

of labour. If one took as a model the division of labour in a modern workshop, in order to apply it

to a whole society, the society best organized for the production of wealth would undoubtedly be

that which had a single chief employer, distributing tasks to different members of the community

according to a previously fixed rule. But this is by no means the case. While inside the modern

workshop the division of labour is meticulously regulated by the authority of the employer,

modern society has no other rule, no other authority for the distribution of labour than free

competition.

Under the patriarchal system, under the caste system, under the feudal and corporative system,

there was division of labour in the whole of society according to fixed rules. Were these rules

established by a legislator? No. Originally born of the conditions of material production, they

were raised to the status of laws only much later. In this way, these different forms of the division

of labour became so many bases of social organization. As for the division in the workshop, it

was very little developed in all these forms of society.

It can even be laid down as a general rule that the less authority presides over the division of

labour inside society, the more the division of labour develops inside the workshop, and the more

it is subjected there to the authority of a single person. Thus authority in the workshop and

authority in society, in relation to the division of labour, are in inverse ratio to each other.

The question now is what kind of workshop it is in which the occupations are very much

separated, where each worker‟s task is reduced to a very simple operation, and where the

authority, capital, groups and directs the work. How was this workshop brought into existence? In

order to answer this question, we shall have to examine how manufacturing industry, properly so-

called, has developed. I am speaking here of that industry which is not yet industry, with its

machinery, but which is already no longer the industry of the artisans of the Middle Ages, nor

domestic industry. We shall not go into great detail: we shall merely give a few main points to

show that history is not to be made with formulas.

One of the most indispensable conditions for the formation of manufacturing industry was the

accumulation of capital, facilitated by the discovery of America and the import of its precious

metals.

It is sufficiently proved that the increase in the means of exchange resulted in the depreciation of

wages and land rents, on the one hand, and the growth of industrial profits on the other. In other

words: to the extent that the propertied class and the working class, the feudal lords and the

people, sank, to that extent the capitalist class, the bourgeoisie, rose.

There were yet other circumstances which contributed simultaneously to the development of

manufacturing industry: the increase of commodities put into circulation from the moment that

trade had penetrated to the East Indies by way of the Cape of Good Hope; the colonial system; the

development of maritime trade.

Another point which has not yet been sufficiently appreciated in the history of manufacturing

industry is the disbanding of the numerous retinues of feudal lords, whose subordinate ranks

became vagrants before entering the workshop. The creation of the workshop was preceded by an

almost universal vagrancy in the 15th and 16th centuries. The workshop found, besides, a

powerful support in the many peasants who, continually driven from the country owing to the

transformation of the fields into pastures and to the progress in agriculture which necessitated

fewer hands for the tillage of the soil, went on congregating in the towns during whole centuries.

The growth of the market, the accumulation of capital, the modification in the social position of

the classes, a large number of persons being deprived of their sources of income, all these are

historical preconditions for the formation of manufacture. It was not, as M. Proudhon says,

friendly agreements between equals that brought men into the workshop. It was not even in the

bosom of the old guilds that manufacture was born. It was the merchant that became head of the


modern workshop, and not the old guildmaster. Almost everywhere there was a desperate

struggle between manufacture and crafts.

The accumulation and concentration of instruments and workers preceded the development of the

division of labour inside the workshop. Manufacture consisted much more in the bringing

together of many workers and many crafts in one place, in one room under the command of one

capital, than in the analysis of labour and the adaptation of a special worker to a very simple task.

The utility of a workshop consisted much less in the division of labour as such than in the

circumstances that work was done on a much larger scale, that many unnecessary expenses were

saved, etc. At the end of the 16th and at the beginning of the 17th century, Dutch manufacture

scarcely knew any division of labour.

The development of the division of labour supposes the assemblage of workers in a workshop.

There is not one single example, whether in the 16th or in the 17th century, of the different

branches of one and the same craft being exploited separately to such an extent that it would have

sufficed to assemble them all in one place so as to obtain a complete, ready-made workshop. But

once the men and the instruments had been brought together, the division of labour, such as it had

existed in the form of the guilds, was reproduced, necessarily reflected inside the workshop.

For M. Proudhon, who sees things upside down, if he sees them at all, the division of labour, in

Adam Smith‟s sense, precedes the workshop, which is a condition of its existence.

Machinery, properly so-called, dates from the end of the 18th century. Nothing is more absurd

than to see in machinery the antithesis of the division of labour, the synthesis restoring unity to

divided labour.

The machine is a unification of the instruments of labour, and by no means a combination of

different operations for the worker himself.

“When, by the division of labour, each particular operation has been simplified to

the use of a single instrument, the linking up of all these instruments, set in motion

by a single engine, constitutes – a machine.” (Babbage, Traité sur l‟économie des

machines [et des manufactures], p. 230, Paris, 1833)

Simple tools; accumulation tools; composite tools; setting in motion of a composite tool by a

single hand engine, by man; setting in motion of these instruments by natural forces, machines;

system of machines having one motor; system of machines having one automatic motor – this is

the progress of machinery.

The concentration of the instruments of production and the division of labour are as inseparable

one from the other as are, in the political sphere, the concentration of public authority and the

division of private interests. England, with the concentration of the land, this instrument of

agricultural labour, has at the same time division of agricultural labour and the application of

machinery to the exploitation of the soil. France, which has the division of the instruments, the

small holdings system, has, in general, neither division of agricultural labour nor application of

machinery to the soil.

For M. Proudhon the concentration of the instruments of labour is the negation of the division of

labour. In reality, we find again the reverse. As the concentration of instruments develops, the

division develops also, and vice versa. This is why every big mechanical invention is followed by

a greater division of labour, and each increase in the division of labour gives rise in turn to new

mechanical inventions.

We need not recall the fact that the great progress of the division of labour began in England after

the invention of machinery. Thus, the weavers and spinners were for the most part peasants like

those one still meets in backward countries. The invention of machinery brought about the

separation of manufacturing industry from agricultural industry. The weaver and the spinner,

united but lately in a single family, were separated by the machine. Thanks to the machine, the


spinner can live in England while the weaver resides in the East Indies. Before the invention of

machinery, the industry of a country was carried on chiefly with raw materials that were the

products of its own soil; in England – wool, in Germany – flax, in France – silks and flax, in the

East Indies and the Levant – cottons, etc. Thanks to the application of machinery and of steam,

the division of labour was about to assume such dimensions that large-scale industry, detached

from the national soil, depends entirely on the world market, on international exchange, on an

international division of labour. In short – the machine has so great an influence on the division of

labour, that when, in the manufacture of some object, a means has been found to produce parts of

it mechanically, the manufacture splits up immediately into two works independent of each other.

Need we speak of the philanthropic and providential aim that M. Proudhon discovers in the

invention and first application of machinery?

When in England the market had become so far developed that manual labour was no longer

adequate, the need for machinery was felt. Then came the idea of the application of mechanical

science, already quite developed in the 18th century.

The automatic workshop opened its career with acts which were anything but philanthropic.

Children were kept at work at the whip‟s end; they were made an object of traffic and contracts

were undertaken with the orphanages. All the laws on the apprenticeship of workers were

repealed, because, to use M. Proudhon‟s phraseology, there was no further need for synthetic

workers. Finally, from 1825 onwards, almost all the new inventions were the result of collisions

between the worker and the employer who sought at all costs to depreciate the worker‟s

specialised ability. After each new strike of any importance, there appeared a new machine. So

little indeed did the worker see in the application of machinery a sort of rehabilitation, restoration

– as M. Proudhon would say – that in the 18th century he stood out for a very long time against

the incipient domination of the automaton.

“Wyatt,” says Doctor Ure, “invented the series of fluted rollers... (the spinning

fingers usually ascribed to Awkright).... The main difficulty did not, to my

apprehension, lie so much in the invention of a proper self-acting mechanism... as

in training human beings to renounce their desultory habits of work, and to

identify themselves with the unvarying regularity of the complex automaton. But

to devise and administer a successful code of factory discipline, suited to the

necessities of factory diligence, was the Herculean enterprise, the noble

achievement of Awkright.” (Vol. I, pp. 21-22, 23)

In short, by the introduction of machinery, the division of labour inside society has grown up, the

task of the worker inside the workshop has been simplified, capital has been concentrated, human

beings have been further dismembered.

When M. Proudhon wants to be an economist, and to abandon for a moment the “evolution of

ideas in serial relation in the understanding,” then he goes and draws erudition from Adam Smith,

from a time when the automatic workshop was only just coming into existence. Indeed, what a

difference between the division of labour as it existed in Adam Smith‟s day and as we see it in the

automatic workshop! In order to make this properly understood, we need only quote a few

passages from Dr. Ure‟s The Philosophy of Manufactures.

“When Adam Smith wrote his immortal elements of economics, automatic

machinery being hardly known, he was properly led to regard the division of

labour as the grand principle of manufacturing improvement; and he showed, in

the example of pin-making, how each handicraftsman, being thereby enabled to

perfect himself by practice in one point, became a quicker and cheaper workman.

In each branch of manufacture he saw that some parts were, on that principle, of

easy execution, like the cutting of pin wires into uniform lengths, and some were

comparatively difficult, like the formation and fixation of their heads; and


therefore he concluded that to each a workman of appropriate value and cost was

naturally assigned. This appropriation forms the very essence of the division of

labour....

“But what was in Dr. Smith‟s time a topic of useful illustration, cannot now be

used without risk of misleading the public mind as to the right principle of

manufacturing industry. In fact, the division, or rather adaptation of labour to the

different talents of men, is little thought of in factory employment. On the

contrary, wherever a process requires a peculiar dexterity and steadiness of hand,

it is withdrawn as soon as possible from the cunning workman, who is prone to

irregularities of many kinds, and it is placed in charge of a peculiar mechanism, so

self-regulating, that a child may superintend it.

“The principle of the factory system then is, to substitute mechanical science for

hand skill, and the partition of a process into its essential constituents, for the

division or gradation of labour among artisans. On the handicraft plan, labour

more or less skilled, was usually the most expensive element of production... but

on the automatic plan, skilled labour gets progressively superseded, and will,

eventually, be replaced by mere overlookers of machines.

“By the infirmity of human nature it happens, that the more skilful the workman,

the more self-willed and intractable he is apt to become, and, of course, the less fit

a component of a mechanical system, in which, by occasional irregularities, he

may do great damage to the whole. The grand object therefore of the modern

manufacturer is, through the union of capital and science, to reduce the task of his

workpeople to the exercise of vigilance and dexterity – faculties, when

concentrated to one process, speedily brought to perfection in the young.

“On the gradation system, a man must serve an apprenticeship of many years

before his hand and eye become skilled enough for certain mechanical feats; but

on the system of decomposing a process into its constituents, and embodying each

part in an automatic machine, a person of common care and capacity may be

entrusted with any of the said elementary parts after a short probation, and may be

transferred from one to another, on any emergency, at the discretion of the master.

Such translations are utterly at variance with the old practice of the division of

labour, which fixed one man to shaping the head of a pin, and another to

sharpening its point, with the most irksome and spirit-wasting uniformity, for a

whole life.... But on the equalisation plan of self-acting machines, the operative

needs to call his faculties only into agreeable exercise.... As his business consists

in ending the work of a well-regulated mechanism, he can learn it in a short

period; and when he transfers his services, from one machine to another, he varies

his task, and enlarges his views, by thinking on those general combinations which

result from his and his companions‟ labours. Thus, that cramping of the faculties,

that narrowing of the mind, that stunting of the frame, which were ascribed, and

not unjustly, by moral writers, to the division of labour, cannot, in common

circumstances, occur under the equable distribution of industry.... It is, in fact, the

constant aim and tendency of every improvement in machinery to supersede

human labour altogether, or to diminish its cost, by substituting the industry of

women and children for that of men; or that of ordinary labourers for trained

artisans.... This tendency to employ merely children with watchful eyes and

nimble fingers, instead of journeymen of long experience, shows how the

scholastic dogma of the division of labour into degrees of skill has been exploded

by our enlightened manufacturers.” (Andre Ure, Philosophie des manufactures ou

Economie industrielle, Vol. I, Chap. 1, pp. 34-35)


What characterises the division of labour inside modern society is that it engenders specialised

functions, specialists, and with them craft-idiocy.

“We are struck with admiration,” says Lemontey, “when we see among the

Ancients the same person distinguishing himself to a high degree as philosopher,

poet, orator, historian, priest, administrator, general of an army. Our souls are

appalled at the sight of so vast a domain. Each one of us plants his hedge and

shuts himself up in his enclosure. I do not know whether by this parcellation the

field is enlarged, but I do know that man is belittled.” (Lemontey, op. cit., p. 213)

What characterises the division of labour in the automatic workshop is that labour has there

completely lost its specialised character. But the moment every special development stops, the

need for universality, the tendency towards an integral development of the individual begins to be

felt. The automatic workshop wipes out specialists and craft-idiocy.

M. Proudhon, not having understood even this one revolutionary side of the automatic workshop,

takes a step backward and proposes to the worker that he make not only the 12th part of a pin, but

successively all 12 parts of it. The worker would thus arrive at the knowledge and the

consciousness of the pin. This is M. Proudhon‟s synthetic labour. Nobody will contest that to

make a movement forward and another movement backward is to make a synthetic movement.

To sum up, M. Proudhon has not gone further than the petty-bourgeois ideal. And to realise this

ideal, he can think of nothing better than to take us back to the journeyman or, at most, to the

master craftsman of the Middle Ages. It is enough, he says somewhere in his book, to have

created a masterpiece once in one‟s life, to have felt oneself just once to be a man. Is not this, in

form as in content, the masterpiece demanded by the trade guild of the Middle Ages?


§ 3. Competition and Monopoly

Good side of competition

“Competition is as essential to labour as

division.... It is necessary ... for the advent of

equality.” (Vol. I. pp. 186, 188)

Bad side of competition

“The principle is the negation of itself. Its most

certain result is to ruin those whom it drags in its

train.” (Vol. I, p. 185)

General reflection

“The drawbacks which follow in its wake, just

as the good it provides... both flow logically

from the principle.” Vol. I, pp. 185-86)

Problem to be solved

“To seek the principle of accommodation, which

must be derived from a law superior to liberty

itself.” (Vol. I, p. 185)

“There can, therefore, be no question here of

destroying competition, a thing as impossible to

destroy as liberty; we have only to find its

equilibrium, I would be ready to say its police.”

(Vol. I, p. 223)

M. Proudhon begins by defending the eternal necessity of competition against those who wish to

replace it by emulation.*

There is no “purposeless emulation,” and as “the object of every passion is

necessarily analogous to the passion itself – a woman for the lover, power for the

ambitious, gold for the miser, a garland for the poet – the object of industrial

emulation is necessarily profit. Emulation is nothing but competition itself.” (Vol.

I, p. 187)

Competition is emulation with a view to profit. Is industrial emulation necessarily emulation with

a view to profit, that is, competition?? M. Proudhon proves it by affirming it. We have seen that,

for him, to affirm is to prove, just as to suppose is to deny.

If the immediate object of the lover is the woman, the immediate object of industrial emulation is

the product and not the profit.

Competition is not industrial emulation, it is commercial emulation. In our time industrial

emulation exists only in view of commerce. There are even phases in the economic life of modern

nations when everybody is seized with a sort of craze for making profit without producing. This

speculation craze, which recurs periodically, lays bare the true character of competition, which

seeks to escape the need for industrial emulation.

If you had told an artisan of the 14th century that the privileges and the whole feudal organization

of industry were going to be abrogated in favour of industrial emulation, called competition, he

would have replied that the privileges of the various corporations, guilds and fraternities were

* The Fourierists. [Note by Engels to 1885 German edition]


organized competition. M. Proudhon does not impose upon this when he affirms that “emulation

is nothing but competition itself.”

“Decree that from the first of January 1847, labour and wages shall be guaranteed

to everybody: immediately an immense relaxation will succeed the high tension of

industry.” (Vol. I. p. 189)

Instead of a supposition, an affirmation and a negation, we have now a decree that M. Proudhon

issues purposely to prove the necessity of competition, its eternity as a category, etc.

If we imagine that decrees are all that is needed to get away from competition, we shall never get

away from it. And if we go so far as to propose to abolish competition while retaining wages, we

shall be proposing nonsense by royal decree. But nations do not proceed by royal decree. Before

framing such ordinances, they must at least have changed from top to bottom the conditions of

their industrial and political existence, and consequently their whole manner of being.

M. Proudhon will reply, with his imperturbable assurance, that it is the hypothesis of “a

transformation of our nature without historical antecedents,” and that he would be right in

“excluding is from the discussion,” we know not in virtue of which ordinance.

M. Proudhon does not know that all history is nothing but a continuous transformation of human

nature.

“Let us stick to the facts. The French Revolution was made for industrial liberty as

much as for political liberty; and although France, in 1789, had not perceived – let

us say it openly – all the consequences of the principle whose realisation it

demanded, it was mistaken neither in its wishes nor in its expectations. Whoever

attempts to deny this loses, in my view, the right to criticism. I will never dispute

with an adversary who puts as principle the spontaneous error of 25 million

men....

“Why then, if competition had not been a principle of social economy, a decree of fate, a

necessity of the human soul, why, instead of abolishing corporations, guilds and brotherhoods,

did nobody think rather of repairing the whole?” (Vol. I. p. 191, 192)

So, since the French of the 18th century abolished corporations, guilds, and fraternities instead of

modifying them, the French of the 19th century must modify competition instead of abolishing it.

Since competition was established in France in the 18th century as a result of historical needs,

this competition must not be destroyed in the 19th century because of other historical needs. M.

Proudhon, not understanding that the establishment of competition was bound up with the actual

development of the men of the 18th century, makes of competition a necessity of the human soul,

in partibus infidelium [literally, territory of the infidels; here, meaning, beyond the realm of

reality.] What would he have made of the great Colbert for the 17th century?

After the revolution comes the present state of affairs. M. Proudhon equally draws facts from it to

show the eternity of competition, by proving that all industries in which this category is not yet

sufficiently developed, as in agriculture, are in a state of inferiority and decrepitude.

To say that there are industries which have not yet reached the stage of competition, that others

again are below the level of bourgeois production, is drivel which gives not the slightest proof of

the eternity of competition.

All M. Proudhon‟s logic amounts to is this: competition is a social relation in which we are now

developing our productive forces. To this truth, he gives no logical development, but only forms,

often very well developed, when he says that competition is industrial emulation, the present-day

mode of freedom, responsibility in labour, constitution of value, a condition for the advent of

equality, a principle of social economy, a decree of fate, a necessity of the human soul, an

inspiration of eternal justice, liberty in division, division in liberty, an economic category.


“Competition and association support each other. Far from excluding each other

they are not even divergent. Whoever says competition already supposes a

common aim. Competition is therefore not egoism, and the most deplorable error

committed by socialism is to have regarded it as the overthrow of society.” (Vol.

I, p. 223)

Whoever says competition says common aim, and that proves, on the one hand, that competition

is association; on the other, that competition is not egoism. And whoever says egoism, does he

not say common aim? Every egoism operates in society and by the fact of society. Hence it

presupposes society, that is to say, common aims, common needs, common means of production,

etc., etc. Is it, then, by mere chance that the competition and association which the socialists talk

about are not even divergent?

Socialists know well enough that present-day society is founded on competition. How could they

accuse competition of overthrowing present-day society which they want to overthrow

themselves? And how could they accuse competition of overthrowing the society to come, in

which they see, on the contrary, the overthrow of competition?

M. Proudhon says, later on, that competition is the opposite of monopoly, and consequently

cannot be the opposite of association.

Feudalism was, from its origins, opposed to patriarchal monarchy; it was thus not opposed to

competition, which was not yet in existence. Does it follow that competition is not opposed to

feudalism?

In actual fact, society, association are denominations which can be given to every society, to

feudal society as well as to bourgeois society which is association founded on competition. How

then can there be socialists, who, by the single word association, think they can refute

competition? And how can M. Proudhon himself wish to defend competition against socialism by

describing competition by the single word association?

All we have just said makes up the beautiful side of competition as M. Proudhon sees it. Now let

us pass on to the ugly side, that is the negative side, of competition, its drawbacks, its destructive,

subversive elements, its injurious qualities.

There is something dismal about the picture M. Proudhon draws of it.

Competition engenders misery, it foments civil war, it “changes natural zones,” mixes up

nationalities, causes trouble in families, corrupts the public conscience, “subverts the notion of

equity, of justice,” of morality, and what is worse, it destroys free, honest trade, and does not

even give in exchange synthetic value, fixed, honest price. It disillusions everyone, even

economists. It pushes things so far as to destroy its very self.

After all the ill M. Proudhon says of it, can there be for the relations of bourgeois society, for its

principles and its illusions, a more disintegrating, more destructive element than competition?

It must be carefully noted that competition always becomes the more destructive for bourgeois

relations in proportion as it urges on a feverish creation of new productive forces, that is, of the

material conditions of a new society. In this respect at least, the bad side of competition would

have its good points.

“Competition as an economic position or phase, considered in its origin, is the

necessary result... of the theory of the reduction of general expenses.” (Vol. I, p.

235)

For M. Proudhon, the circulation of the blood must be a consequence of Harvey‟s theory.

“Monopoly is the inevitable end of competition, which engenders it by a continual

negation of itself. This generation of monopoly is in itself a justification of it....

Monopoly is the natural opposite of competition... but as soon as competition is


necessary, it implies the idea of monopoly, since monopoly is, as it were, the seat

of each competing individuality.” (Vol. I, pp. 236, 237)

We rejoice with M. Proudhon that he can for once at least properly apply his formula to thesis

and antithesis. Everyone knows that modern monopoly is engendered by competition itself.

As for the content, M. Proudhon clings to poetic images. Competition made “of every subdivision

of labour a sort of sovereignty in which each individual stood with his power and his

independence.” Monopoly is “the seat of every competing individuality.” The sovereignty is

worth at least as much as the seat.

M. Proudhon talks of nothing but modern monopoly engendered by competition. But we all know

that competition was engendered by feudal monopoly. Thus competition was originally the

opposite of monopoly and not monopoly the opposite of competition. So that modern monopoly

is not a simple antithesis, it is on the contrary the true synthesis.

Thesis: Feudal monopoly, before competition.

Antithesis: Competition.

Synthesis: Modern monopoly, which is the negation of feudal monopoly, in so far as it implies the

system of competition, and the negation of competition in so far as it is monopoly.

Thus modern monopoly, bourgeois monopoly, is synthetic monopoly, the negation of the

negation, the unity of opposites. It is monopoly in the pure, normal, rational state.

M. Proudhon is in contradiction with his own philosophy when he turns bourgeois monopoly into

monopoly in the crude, primitive, contradictory, spasmodic state. M. Rossi, whom M. Proudhon

quotes several times on the subject of monopoly, seems to have a better grasp of the synthetic

character of bourgeois monopoly. In his Cours d‟économie politique, he distinguishes between

artificial monopolies and natural monopolies. Feudal monopolies, he says, are artificial, that is,

arbitrary; bourgeois monopolies are natural, that is, rational.

Monopoly is a good thing, reasons M. Proudhon, since it is an economic category, an emanation

“from the impersonal reason of humanity.” Competition, again, is a good thing since it also is an

economic category. But what is not good is the reality of monopoly and the reality of

competition. What is still worse is that competition and monopoly devour each other. What is to

be done? Look for the synthesis of these two eternal thoughts, wrest it from the bosom of God,

where is has been deposited from time immemorial.

In practical life we find not only competition, monopoly and the antagonism between them, but

also the synthesis of the two, which is not a formula, but a movement. Monopoly produces

competition, competition produces monopoly. Monopolists are made from competition;

competitors become monopolists. If the monopolists restrict their mutual competition by means

of partial associations, competition increases among the workers; and the more the mass of the

proletarians grows as against the monopolists of one nation, the more desperate competition

becomes between the monopolists of different nations. The synthesis is of such a character that

monopoly can only maintain itself by continually entering into the struggle of competition.

To make the dialectical transition to the taxes which come after monopoly, M. Proudhon talks to

us about the social genius which, after zigzagging intrepidly onward,

“after striding with a jaunty step, without repenting and without halting, reaches

the corner of monopoly, casts backward a melancholy glance, and, after profound

reflection, assails all the objects of production with taxes, and creates a whole

administrative organisation, in order that all employments be given to the

proletariat and paid by the men of monopoly.” (Vol. I, pp. 284, 285)

What can we say of this genius, which, while fasting, walks about in a zigzag? And what can we

say of this walking which has no other object in view than that of destroying the bourgeois by


taxes, whereas taxes are the very means of giving the bourgeois the wherewithal to preserve

themselves as the ruling class?

Merely to give a glimpse of the manner in which M. Proudhon treats economic details, it suffices

to say that, according to him, the tax on consumption was established with a view to equality, and

to relieve the proletariat.

The tax on consumption has assumed its true development only since the rise of the bourgeoisie.

In the hands of industrial capital, that is, of sober and economical wealth, which maintains,

reproduces, and increases itself by the direct exploitation of labour, the tax on consumption was a

means of exploiting the frivolous, gay, prodigal wealth of the fine lords who did nothing but

consume. James Steuart clearly developed this original purpose of the tax on consumption in his

Recherches des principes de l‟economie politique, which he published 10 years before Adam

Smith.

“Under the pure monarchy, the prince seems jealous, as it were, of growing

wealth, and therefore imposes taxes upon people who are growing richer. Under

the limited government they are calculated chiefly to affect those who from rich

are growing poorer. Thus the monarch imposes a tax upon industry, where

everyone is rated in proportion to the gain he is supposed to make by his

profession. The poll-tax and taille are likewise proportioned to the supposed

opulence of everyone libel to them.... In limited governments, impositions are

more generally laid upon consumption.” (Vol. II, pp. 190-91)

As for the logical sequence of taxes, of the balance of trade, of credit – in the understanding of M.

Proudhon – we could only remark that the English bourgeoisie, on attaining its political

constitution under William of Orange, created all at once a new system of taxes, public credit,

and the system of protective duties, as soon as it was in a position freely to develop its conditions

of existence.

This brief summary will suffice to give the reader a true idea of M. Proudhon‟s lucubrations on

the police or on taxes, the balance of trade, credit, communism, and population. We defy the most

indulgent criticism to treat these chapters seriously.

§ 4. Property or Ground Rent

In each historical epoch, property has developed differently and under a set of entirely different

social relations. Thus to define bourgeois property is nothing else than to give an exposition of all

the social relations of bourgeois production.

To try to give a definition of property as of an independent relation, a category apart, an abstract

and eternal idea, can be nothing but an illusion of metaphysics or jurisprudence.

M. Proudhon, while seeming to speak of property in general, deals only with landed property,

with ground rent.

“The origin of rent, as property, is, so to speak, extra-economic: it rests in

psychological and moral considerations which are only very distantly connected

with the production of wealth.” (Vol. II, p. 265)

So M. Proudhon declares himself incapable of understanding the economic origin of rent and of

property. He admits that this incapacity obliges him to resort to psychological and moral

considerations, which, indeed, while only distantly connected with the production of wealth, have

yet a very close connection with the narrowness of his historical views. M. Proudhon affirms that

there is something mystical and mysterious about the origin of property. Now, to see mystery in

the origin of property – that is, to make a mystery of the relation between production itself and

the distribution of the instruments of production – is not this, to use M. Proudhon‟s language, a

renunciation of all claims to economic science?

M. Proudhon


“confines himself to recalling that at the seventh epoch of economic evolution –

credit – when fiction had caused reality to vanish, and human activity threatened

to lose itself in empty space, it had become necessary to bind man more closely to

nature. Now, rent was the price of this new contract.” (Vol. II, p. 269)

L’homme aux quarante écus* foresaw a M. Proudhon of the future:

“Mr. Creator, by your leave: everyone is master in his own world: but you will

never make me believe that the one we live in is made of glass.”

In your world, where credit was a means of losing oneself in empty space, it is very possible that

property became necessary in order to bind man to nature. In the world of real production, where

landed property always precedes credit, M. Proudhon‟s horror vacui [horror of a vacuum] could

not exist.

The existence of rent once admitted, whatever its origin, it becomes a subject of mutually

antagonistic negotiations between the farmer and the landed proprietor. What is the ultimate

result of these negotiations, in other words, what is the average amount of rent? This is what M.

Proudhon says:

“Ricardo‟s theory answers this question. In the beginning of society, when man,

new to earth, had before him nothing but huge forests, when the earth was vast

and when industry was beginning to come to life, rent must have been nil. Land,

as yet unformed by labour, was an object of utility; it was not an exchange value,

it was common, not social. Little by little, the multiplication of families and the

progress of agriculture caused the price of land to make itself felt. Labour came to

give the soil its worth; from this, rent came into being. The more fruit a field

yielded with the same amount of labour, the higher it was valued; hence the

tendency of proprietors was always to arrogate to themselves the whole amount of

the fruits of the soil, less the wages of the farm – that is, less the costs of

production. Thus property followed on the heels of labour to take from it all the

product that exceeded the actual expenses. As the proprietor fulfils a mystic duty

and represents the community as against the colonus, that farmer is, by the

dispensation of Providence, no more than a responsible labourer, who must

account to society for all he reaps above his legitimate wage.... In essence and by

destination, then, rent is an instrument of distributive justice, one of the thousand

means that the genius of economy employs to attain to equality. It is an immediate

land valuation which is carried out contradictorily by landowners and farmers,

without any possible collusion, in a higher interest, and whose ultimate result

must be to equalise the possession of the land between the exploiters of the soil

and the industrialists.... It needed no less than this magic of property to snatch

from the colonus the surplus of his product which he cannot help regarding as his

own and of which he considers himself to be exclusively the author. Rent, or

rather property, has broken down agricultural egoism and created a solidarity that

no power, no partition of the land could have brought into being.... The moral

effect of property having been secured, at present what remains to be done is to

distribute the rent.” (Vol. II, pp. 270-72)

All this tumult of words may be reduced firstly to this: Ricardo says that the excess of the price of

agricultural products over their cost of production, including the ordinary profit and interest on

the capital, gives the measure of the rent. M. Proudhon does better. He makes the landowner

* The Man of Forty Ecus is the hero of Voltaire‟s story of the same name. He is a modest, hard-working peasant with

an annual income of 40 écus (silver coins used in France in the 17th-18th centuries). The next passage is quoted from

the story.


intervene, like a Deus ex machina,2*

and snatch from the colonus all the surplus of his production

over the cost of production. He makes use of the intervention of the landowner to explain

property, of the intervention of the rent-receiver to explain rent. He answers the problem by

formulating the same problem and adding an extra syllable.3*

Let us note also that in determining rent by the difference in fertility of the soil, M. Proudhon

assigns a new origin to it, since land, before being assessed according to different degrees of

fertility, “was not,” in his view, “an exchange value, but was common.” What, then, has happened

to the fiction about rent having come into being through the necessity of bringing back to the land

man who was about to lose himself in the infinity of empty space?

Now let us free Ricardo‟s doctrine from the providential, allegorical, and mystical phrases in

which M. Proudhon has been careful to wrap it.

Rent, in the Ricardian sense, is property in land in its bourgeois state; that is, feudal property

which has become subject to the conditions of bourgeois production.

We have seen that, according to the Ricardian doctrine, the price of all objects is determined

ultimately by the cost of production, including the industrial profit; in other words, by the labour

time employed. In manufacturing industry, the price of the product obtained by the minimum of

labour regulates the price of all other commodities of the same kind, seeing that the cheapest and

most productive instruments of production can be multiplied to infinity and that competition

necessarily gives rise to a market price – that is, a common price for all products of the same

kind.

In agricultural industry, on the contrary, it is the price of the product obtained by the greatest

amount of labour which regulates the price of all products of the same kind. In the first place, one

cannot, as in manufacturing industry, multiply at will the instruments of production possessing

the same degree of productivity, that is, plots of land with the same degree of fertility. Then, as

population increases, land of an inferior quality begins to be exploited, or new outlays of capital,

proportionately less productive than before, are made upon the same plot of land. In both cases a

greater amount of labour is expended to obtain a proportionately smaller product. The needs of

the population having rendered necessary this increase of labour, the product of the land whose

exploitation is the more costly has as certain a sale as that of a piece of land whose exploitation is

cheaper. As competition levels the market price, the product of the better soil will be paid for as

dearly as that of the inferior. It is the excess of the price of the products of the better soil over the

cost of their production that constitutes rent. If one could always have at one‟s disposal plots of

land of the same degree of fertility; if one could, as in manufacturing industry, have recourse

continually to cheaper and more productive machines, or if the subsequent outlays of capital

produced as much as the first, then the price of agricultural products would be determined by the

price of commodities produced by the best instruments of production, as we have seen with the

price of manufactured products. But, from this moment rent would have disappeared also.

For the Ricardian doctrine4*

to be generally true, it is moreover essential that capital should be

freely applicable to different branches of industry; that a strongly developed competition among

the capitalists should have brought profits to an equal level; that the farmer should be no more

than an industrial capitalist claiming for the use of his capital on the land,5†

a profit equal to that

2 Literally, god out of the machine, a reference to actors in theatres of antiquity who made their appearance by stage

machinery. Figuratively, a person who appears unexpectedly to save a situation. – Ed. 3 Propriété (property) is explained by the intervention of the propriétaire (proprietor), and rente (rent), by the

intervention of the rentier (rent-receiver). – Ed. 4 In the copy presented by Marx to N. Utina, the beginning of the sentence was altered as follows: “For the Ricardian

doctrine, once the premises granted, to be generally true, it is moreover essential that…” – Ed. 5 In the copy presented to N. Utina, the words “on inferior land” were altered to “on the land.” – Ed.


which he would draw from his capital if it were applied in any kind of manufacture; that

agricultural exploitation should be subjected to the regime of large-scale industry; and finally,

that the landowner himself should aim at nothing beyond the money return.

It may happen, as in Ireland, that rent does not yet exist, although the letting of land has reached

an extreme development there. Rent being the excess not only over wages, but also over

industrial profit, it cannot exist where the landowner‟s revenue is nothing but a mere levy on

wages.

Thus, far from converting the exploiter of the land, the farmer, into a simple labourer, and

“snatching from the cultivator the surplus of his product, which he cannot help regarding as his

own,” rent confronts the landowner, not with the slave, the serf, the payer of tribute, the wage

labourer, but with the industrial capitalist.

Once constituted as ground rent, ground property has in its possession only the surplus over

production costs, which are determined not only by wages but also by industrial profit. It is

therefore from the landowner that ground rent snatched a part of his income. Thus, there was a

big lapse of time before the feudal farmer was replaced by the industrial capitalist. In Germany,

for example, this transformation began only in the last third of the 18th century. It is in England

alone that this relation between the industrial capitalist and the landed proprietor has been fully

developed.

So long as there was only M. Proudhon‟s colonus, there was no rent. The moment rent exists, the

colonus is no longer the farmer, but the worker, the farmer‟s colonus. The abasement of the

labourer, reduced to the role of a simple worker, day labourer, wage-earner, working for the

industrial capitalist; the invention of the industrial capitalist, exploiting the land like any other

factory; the transformation of the landed proprietor from a petty sovereign into a vulgar usurer;

these are the different relations expressed by rent.

Rent, in the Ricardian sense, is patriarchal agriculture transformed into commercial industry,

industrial capital applied to land, the town bourgeoisie transplanted into the country. Rent, instead

of binding man to nature, has merely bound the exploitation of the land to competition. Once

established as rent, landed property itself is the result of competition, since from that time

onwards it depends on the market value of agricultural produce. As rent, landed property is

mobilised and becomes an article of commerce. Rent is possible only from the moment when the

development of urban industry, and the social organisation resulting therefrom, force the

landowner to aim solely at cash profits, at the monetary relation of his agricultural products – in

fact to look upon his landed property only as a machine for coining money. Rent has so

completely divorced the landed proprietor from the soil, from nature, that he has no need even to

know his estates, as is to be seen in England. As for the farmer, the industrial capitalist and the

agricultural worker, they are no more bound to the land they exploit than are the employer and the

worker in the factories to the cotton and wool they manufacture; they feel an attachment only for

the price of their production, the monetary product. Hence the jeremiads of the reactionary

parties, who offer up all their prayers for the return of feudalism, of the good old patriarchal life,

of the simple manners and the fine virtues of our forefathers. The subjection of the soil to the

laws which dominate all other industries is and always will be the subject of interested

condolences. Thus it may be said that rent has become the motive power which has introduced

idyll into the movement of history.

Ricardo, after postulating bourgeois production as necessary for determining rent, applies the

conception of rent, nevertheless, to the landed property of all ages and all countries. This is an

error common to all the economists, who represent the bourgeois relations of production as

eternal categories.

From the providential aim of rent – which is, for M. Proudhon, the transformation of the colonus

into a responsible worker, he passes to the equalised reward of rent.


Rent, as we have just seen, is constituted by the equal price of the products of lands of unequal

fertility, so that a hectolitre of corn which has cost 10 francs is sold for 20 francs if the cost of

production rises to 20 francs upon soil of inferior quality.

So long as necessity forces the purchase of all the agricultural products brought into the market,

the market price is determined by the cost of the most expensive product. Thus it is this

equalisation of price, resulting from competition and not from the different fertilities of the lands,

that secures to the owner of the better soil a rent of 10 francs for every hectolitre that his tenant

sells.

Let us suppose for a moment that the price of corn is determined by the labour time needed to

produce it, and at once the hectolitre of corn obtained from the better soil will sell at 10 francs,

while the hectolitre of corn obtained on the inferior soil will cost 20 francs. This being admitted,

the average market price will be 15 francs, whereas, according to the law of competition, it is 20

francs. If the average price were 15 francs, there would be no occasion for any distribution,

whether equalised or otherwise, for there would be no rent. Rent exists only when one can sell for

20 francs the hectolitre of corn which has cost the producer 10 francs. M. Proudhon supposes

equality of the market price, with unequal costs of production, in order to arrive at an equalised

sharing out of the product of inequality.

We understand such economists as Mill, Cherbuliez, Hilditch, and others demanding that rent

should be handed over to the state to serve in place of taxes. That is a frank expression of the

hatred the industrial capitalist bears towards the landed proprietor, who seems to him a useless

thing, an excrescence upon the general body of bourgeois production.

But first to make the price of the hectolitre of corn 20 francs in order then to make a general

distribution of the 10 francs overcharge levied on the consumer, is indeed enough to make the

social genius pursue its zigzag course mournfully – and knock its head against some corner.

Rent becomes, under M. Proudhon‟s pen,

“an immense land valuation, which is carried out contradictorily by landowners

and farmers... in a higher interest, and whose ultimate result must be to equalise

the possession of land between exploiters of the soil and the industrialists.” (Vol.

II, p. 271)

For any land valuation based upon rent to be of practical value, the conditions of present society

must not be departed from.

Now, we have shown that the farm rent paid by the farmer to the landlord expresses the rent with

any exactitude only in the countries most advanced in industry and commerce. And even this rent

often includes interest paid to the landlord on capital incorporated in the land. The location of the

land, the vicinity of towns, and many other circumstances influence the farm rent and modify the

ground rent. These peremptory reasons would be enough to prove the inaccuracy of a land

valuation based on rent.

Thus history, far from supplying, in rent, a ready-made land valuation, does nothing but change

and turn topsy-turvy the land valuations already made.

Finally, fertility is not so natural a quality as might be thought; it is closely bound up with the

social relations of the time. A piece of land may be very fertile for corn growing, and yet the

market price may decide the cultivator to turn it into an artificial pastureland and thus render it

infertile.

M. Proudhon has improvised his land valuation, which has not even the value of an ordinary land

valuation, only to give substance to the providentially equalitarian aim of rent.

“Rent,” continues M. Proudhon, “is the interest paid on a capital which never

perishes, namely – land. And as the capital is capable of no increase in matter, but

only of an indefinite improvement in its use, it comes about that while the interest


or profit on a loan (mutuum) tends to diminish continually through abundance of

capital, rent tends always to increase through the perfecting of industry, from

which results the improvement in the use of the land.... Such, in its essence, is

rent.” (Vol. II, p. 265)

This time, M. Proudhon sees in rent all the characteristics of interest, save that it is derived from

capital of a specific nature. This capital is land, an eternal capital, “which is capable of no

increase in matter, but only an indefinite improvement in its use.” In the progressive advance of

civilisation, interest has a continual tendency to fall, whilst rent continually tends to rise. Interest

falls because of the abundance of capital; rent rises owing to the improvements brought about in

industry, which results in an ever better utilisation of land.

Such, in its essence, is the opinion of M. Proudhon.

Let us first examine how far it is true to say that rent is interest on capital.

For the landed proprietor himself, rent represents the interest on the capital that the land has cost

him, or that he would draw from it if he sold it. But in buying or selling land he only buys or sells

rent. The price he pays to make himself a receiver of rent is regulated by the rate of interest in

general and has nothing to do with actual nature of rent. The interest on capital invested in land is

in general lower than the interest on capital invested in manufacture or commerce. Thus, for those

who make no distinction between the interest that the land represents to the owner and the rent

itself, the interest on land capital diminishes still more than does the interest on other capital. But

it is not a question of the purchase or sale price of rent, of the marketable value of rent, of

capitalised rent, it is a question of rent itself.

Farm rent can imply again, apart from rent proper, the interest on the capital incorporated in the

land. In this instance the landlord receives this part of the farm rent, not as a landlord but as a

capitalist; but this is not the rent proper that we are to deal with.

Land, so long as it is not exploited as a means of production, is not capital. Land as capital can be

increased just as much as all the other instruments of production. Nothing is added to its matter,

to use M. Proudhon‟s language, but the lands which serve as instruments of production are

multiplied. The very fact of applying further outlays of capital to land already transformed into

means of production increases land as capital without adding anything to land as matter – that is,

to the extent of the land. M. Proudhon‟s land as matter is the Earth in its limitation. As for the

eternity he attributes to land, we grant readily it has this virtue as matter. Land as capital is no

more eternal than any other capital.

Gold and silver, which yield interest, are just as lasting and eternal as land. If the price of gold

and silver falls, while that of land keeps rising, this is certainly not because of its more or less

eternal nature.

Land as capital is fixed capital; but fixed capital gets used up just as much as circulating capital.

Improvements to the land need production and upkeep; they last only for a time; and this they

have in common with all other improvements used to transform matter into means of production.

If land as capital were eternal, some lands would present a very different appearance from what

they do today, and we should see the Roman Campagna, Sicily, Palestine, in all the splendour of

their former prosperity.

There are even instances when land as capital might disappear, even though the improvements

remain incorporated in the land.

In the first place, this occurs every time rent proper is wiped out by the competition of new and

more fertile soils; secondly, the improvements which might have been valuable at one time cease

to be of value the moment they become universal owing to the development of agronomy.


The representative of land as capital is not the landlord, but the farmer. The proceeds yielded by

land as capital are interest and industrial profit, not rent. There are lands which yield such interest

and profit but still yield no rent.

Briefly, land in so far as it yields interest, is land capital, and as land capital it yields no rent, it is

not landed property. Rent results from the social relations in which the exploitation of the land

takes place. It cannot be a result of the more or less solid, more or less durable nature of the soil.

Rent is a product of society and not of the soil.

According to M. Proudhon, “improvement in the use of the land” – a consequence “of the

perfecting of industry” – causes the continual rise in rent. On the contrary, this improvement

causes its periodic fall.

Wherein consists, in general, any improvement, whether in agriculture or in manufacture? In

producing more with the same labour; in producing as much, or even more, with less labour.

Thanks to these improvements, the farmer is spared from using a greater amount of labour for a

relatively smaller product. He has no need, therefore, to resort to inferior soils, and instalments of

capital applied successively to the same soil remain equally productive.

Thus, these improvements, far from continually raising rent as M. Proudhon says, become on the

contrary so many temporary obstacles preventing its rise.

The English landowners of the 17th century were so well aware of this truth, that they opposed

the progress of agriculture for fear of seeing their incomes diminish. (See Petty, an English

economist of the time of Charles II.)

§ 5. Strikes and Combinations of Workers

“Every upward movement in wages can have no other effect than a rise in the

price of corn, wine, etc., that is, the effect of a dearth. For what are wages? They

are the cost price of corn, etc.; they are the integrant price of everything. We may

go even further: wages are the proportion of the elements composing wealth and

consumed reproductively every day by the mass of the workers. Now, to double

wages ... is to attribute to each one of the producers a greater share than his

product, which is contradictory, and if the rise extends only to a small number of

industries, it brings a general disturbance in exchange; in a word, a dearth.... It is

impossible, I declare, for strikes followed by an increase in wages not to

culminate in a general rise in prices: this is as certain as that two and two make

four.” (Proudhon, Vol. I, pp. 110 and 111)

We deny all these assertions, except that two and two make four.

In the first place, there is no general rise in prices. If the price of everything doubles at the same

time as wages, there is no change in price, the only change is in terms.

Then again, a general rise in wages can never produce a more or less general rise in the price of

goods. Actually, if every industry employed the same number of workers in relation to fixed

capital or to the instruments used, a general rise in wages would produce a general fall in profits

and the current price of goods would undergo no alteration.

But as the relation of manual labour to fixed capital is not the same in different industries, all the

industries which employ a relatively greater mass of capital and fewer workers, will be forced

sooner or later to lower the price of their goods. In the opposite case, in which the price of their

goods is not lowered, their profit will rise above the common rate of profits. Machines are not

wage-earners. Therefore, the general rise in wages will affect less those industries, which,

compared with the others, employ more machines than workers. But as competition always tends

to level the rate of profits, those profits which rise above the average rate cannot but be transitory.

Thus, apart from a few fluctuations, a general rise in wages will lead, not as M. Proudhon says, to


a general increase in prices, but to a partial fall – that is a fall in the current price of the goods that

are made chiefly with the help of machines.

The rise and fall of profits and wages expresses merely the proportion in which capitalists and

workers share in the product of a day‟s work, without influencing in most instances the price of

the product. But that “strikes followed by an increase in wages culminate in a general rise in

prices, in a dearth even” – those are notions which can blossom only in the brain of a poet who

has not been understood.

In England, strikes have regularly given rise to the invention and application of new machines.

Machines were, it may be said, the weapon employed by the capitalist to quell the revolt of

specialised labour. The self-acting mule, the greatest invention of modern industry, put out of

action the spinners who were in revolt. If combinations and strikes had no other effect than that of

making the efforts of mechanical genius react against them, they would still exercise an immense

influence on the development of industry.

“I find,” continues M. Proudhon, “in an article published by M. Leon Faucher...

September 1845, that for some time the British workers have got out of the habit

of combination, which is assuredly a progress for which one cannot but

congratulate them: but this improvement in the morale of the workers comes

chiefly from their economic education. „It is not on the manufacturers,‟ cries a

spinning-mill worker at a Bolton meeting, „that wages depend. In periods of

depression the masters are, so to speak, merely the whip with which necessity

arms itself, and whether they want to or not, they have to deal blows. The

regulative principle is the relation of supply and demand; and the masters have not

this power‟.... “Well done!” cries M. Proudhon. “These are well-trained workers,

model workers, etc., etc., etc. Such poverty did not exist in Britain; it will not

cross the Channel.” (Proudhon, Vol. I, pp. 261 and 262)

Of all the towns in England, Bolton is the one in which the radicalism is the most developed. The

Bolton workers are known to be the most revolutionary of all. At the time of the great agitation in

England for the abolition of the Corn Laws, the English manufacturers thought that they could

cope with the landowners only by thrusting the workers to the fore. But as the interests of the

workers were no less opposed to those of the manufacturers than the interests of the

manufacturers were to those of the landowners, it was natural that the manufacturers should fare

badly in the workers‟ meetings. What did the manufacturers do? To save appearances they

organised meetings composed, to a large extent, of foremen, of the small number of workers who

were devoted to them, and of the real friends of trade. When later on the genuine workers tried, as

in Bolton and Manchester, to take part in these sham demonstrations, in order to protest against

them, they were forbidden admittance on the ground that it was a ticket meeting – a meeting to

which only persons with entrance cards were admitted. Yet the posters placarded on the walls had

announced public meetings. Every time one of these meetings was held, the manufacturers‟

newspapers gave a pompous and detailed account of the speeches made. It goes without saying

that it was the foremen who made these speeches. The London papers reproduced them word for

word. M. Proudhon has the misfortune to take foremen for ordinary workers, and enjoins them

not to cross the Channel.

If in 1844 and 1845 strikes drew less attention than before, it was because 1844 and 1845 were

the first two years of prosperity that British industry had had since 1837. Nevertheless none of the

trades unions had been dissolved.

Now let us listen to the foremen of Bolton. According to them manufacturers have no command

over wages because they have no command over the price of products, and they have no

command over the price of products because they have no command over the world market. For

this reason, they wish it to be understood that combinations should not be formed to extort an


increase in wages from the masters. M. Proudhon, on the contrary, forbids combinations for fear

they should be followed by a rise in wages which would bring with it a general dearth. We have

no need to say that on one point there is an entente cordiale between the foremen and M.

Proudhon: that a rise in wages is equivalent to a rise in the price of products.

But is the fear of a dearth the true cause of M. Proudhon‟s rancour? No. Quite simple, he is

annoyed with the Bolton foremen because they determine value by supply and demand and hardly

take any account of constituted value, of value which has passed into the state of constitution, of

the constitution of value, including permanent exchangeability and all the other proportionalities

of relations and relations of proportionality, with Providence at their side.

“A workers‟ strike is illegal, and it is not only the Penal Code that says so, it is the

economic system, the necessity of the established order.... That each worker

individually should dispose freely over his person and his hands, this can be

tolerated, but that workers should undertake by combination to do violence to

monopoly, is something society cannot permit.” (Vol. I, pp. 334 and 335)

M. Proudhon wants to pass off an article of the Penal Code as a necessary and general result of

bourgeois relations of production.

In England, combination is authorised by an Act of Parliament, and it is the economic system

which has forced Parliament to grant this legal authorisation. In 1825, when, under the Minister

Huskisson, Parliament had to modify the law in order to bring it more and more into line with the

conditions resulting from free competition, it had of necessity to abolish all laws forbidding

combinations of workers. The more modern industry and competition develop, the more elements

there are which call forth and strengthen combination, and as soon as combination becomes an

economic fact, daily gaining in solidity, it is bound before long to become a legal fact.

Thus the article of the Penal Code proves at the most that modern industry and competition were

not yet well developed under the Constituent Assembly and under the Empire.6

Economists and socialists7*

are in agreement on one point: the condemnation of combination.

Only they have different motives for their act of condemnation.

The economists say to workers:

Do not combine. By combination you hinder the regular progress of industry, you prevent

manufacturers from carrying out their orders, you disturb trade and you precipitate the invasion of

machines which, by rendering your labour in part useless, force you to accept a still lower wage.

Besides, whatever you do, your wages will always be determined by the relation of hands

demanded to hands supplied, and it is an effort as ridiculous as it is dangerous for you to revolt

against the eternal laws of political economy.

The socialists say to the workers:

Do not combine, because what will you gain by it anyway? A rise in wages? The economists will

prove to you quite clearly that the few ha‟pence you may gain by it for a few moments if you

succeed will be followed by a permanent fall. Skilled calculators will prove to you that it would

take you years merely to recover, through the increase in your wages, the expenses incurred for

the organisation and upkeep of the combinations.

6 The laws in operation at that time in France – the so-called Le Chapelier law adopted by the Constituent Assembly in

1791 during the revolution and the criminal code elaborated under the Napoleonic Empire – forbade the workers to

form labour unions or to go on strike. The prohibition of trade unions was abolished in France in 1884. 7 That is, the socialists of that time: the Fourierists in France, the Owenites in England. [Note by Engels to the 1885

German edition]


And we, as socialists, tell you that, apart from the money question, you will continue nonetheless

to be workers, and the masters will still continue to be the masters, just as before. So no

combination! No politics! For is not entering into combination engaging in politics?

The economists want the workers to remain in society as it is constituted and as it has been signed

and sealed by them in their manuals.

The socialists want the workers to leave the old society alone, the better to be able to enter the

new society which they have prepared for them with so much foresight.

In spite of both of them, in spite of manuals and utopias, combination has not yet ceased for an

instant to go forward and grow with the development and growth of modern industry. It has now

reached such a stage, that the degree to which combination has developed in any country clearly

marks the rank it occupies in the hierarchy of the world market. England, whose industry has

attained the highest degree of development, has the biggest and best organised combinations.

In England, they have not stopped at partial combinations which have no other objective than a

passing strike, and which disappear with it. Permanent combinations have been formed, trades

unions, which serve as ramparts for the workers in their struggles with the employers. And at the

present time all these local trades unions find a rallying point in the National Association of

United Trades, the central committee of which is in London, and which already numbers 80,000

members. The organisation of these strikes, combinations, and trades unions went on

simultaneously with the political struggles of the workers, who now constitute a large political

party, under the name of Chartists.

The first attempt of workers to associate among themselves always takes place in the form of

combinations.

Large-scale industry concentrates in one place a crowd of people unknown to one another.

Competition divides their interests. But the maintenance of wages, this common interest which

they have against their boss, unites them in a common thought of resistance – combination. Thus

combination always has a double aim, that of stopping competition among the workers, so that

they can carry on general competition with the capitalist. If the first aim of resistance was merely

the maintenance of wages, combinations, at first isolated, constitute themselves into groups as the

capitalists in their turn unite for the purpose of repression, and in the face of always united

capital, the maintenance of the association becomes more necessary to them than that of wages.

This is so true that English economists are amazed to see the workers sacrifice a good part of their

wages in favour of associations, which, in the eyes of these economists, are established solely in

favour of wages. In this struggle – a veritable civil war – all the elements necessary for a coming

battle unite and develop. Once it has reached this point, association takes on a political character.

Economic conditions had first transformed the mass of the people of the country into workers.

The combination of capital has created for this mass a common situation, common interests. This

mass is thus already a class as against capital, but not yet for itself. In the struggle, of which we

have noted only a few phases, this mass becomes united, and constitutes itself as a class for itself.

The interests it defends become class interests. But the struggle of class against class is a political

struggle.

In the bourgeoisie we have two phases to distinguish: that in which it constituted itself as a class

under the regime of feudalism and absolute monarchy, and that in which, already constituted as a

class, it overthrew feudalism and monarchy to make society into a bourgeois society. The first of

these phases was the longer and necessitated the greater efforts. This too began by partial

combinations against the feudal lords.

Much research has been carried out to trace the different historical phases that the bourgeoisie has

passed through, from the commune up to its constitution as a class.

http://www.marxists.org/glossary/orgs/n/a.htm#naut

http://www.marxists.org/glossary/orgs/n/a.htm#naut


But when it is a question of making a precise study of strikes, combinations and other forms in

which the proletarians carry out before our eyes their organisation as a class, some are seized with

real fear and others display a transcendental disdain.

An oppressed class is the vital condition for every society founded on the antagonism of classes.

The emancipation of the oppressed class thus implies necessarily the creation of a new society.

For the oppressed class to be able to emancipate itself, it is necessary that the productive powers

already acquired and the existing social relations should no longer be capable of existing side by

side. Of all the instruments of production, the greatest productive power is the revolutionary class

itself. The organisation of revolutionary elements as a class supposes the existence of all the

productive forces which could be engendered in the bosom of the old society.

Does this mean that after the fall of the old society there will be a new class domination

culminating in a new political power? No.

The condition for the emancipation of the working class is the abolition of every class, just as the

condition for the liberation of the third estate, of the bourgeois order, was the abolition of all

estates and all orders.*

The working class, in the course of its development, will substitute for the old civil society an

association which will exclude classes and their antagonism, and there will be no more political

power properly so-called, since political power is precisely the official expression of antagonism

in civil society.

Meanwhile the antagonism between the proletariat and the bourgeoisie is a struggle of class

against class, a struggle which carried to its highest expression is a total revolution. Indeed, is it at

all surprising that a society founded on the opposition of classes should culminate in brutal

contradiction, the shock of body against body, as its final dénouement?

Do not say that social movement excludes political movement. There is never a political

movement which is not at the same time social.

It is only in an order of things in which there are no more classes and class antagonisms that

social evolutions will cease to be political revolutions. Till then, on the eve of every general

reshuffling of society, the last word of social science will always be:

“Le combat ou la mort; la lutte sanguinaire ou le néant. C‟est ainsi que la quéstion

est invinciblement posée.” [From the novel Jean Ziska by George Sand: “Combat

or Death: bloody struggle or extinction. It is thus that the question is inexorably

put.”]

* Estates here in the historical sense of the estates of feudalism, estates with definite and limited privileges. The

revolution of the bourgeoisie abolished the estates and their privileges. Bourgeois society knows only classes. It was,

therefore, absolutely in contradiction with history to describe the proletariat as the “fourth estate.” [Engels, 1885

German edition]

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